Cultural conservatives, anti-gamblers, and others opposed to gambling on the Internet scored a victory this Sunday when Congress slipped the Unlawful Internet Gambling Enforcement Act into an unrelated port security bill, thus banning gambling on the Internet. Or did they? Yahoo.finance uk explains:
It’s a safe bet that the passage of anti-Internet gambling legislation by Congress has effectively ended the party for Gibraltar’s PartyGaming and other online betting companies based outside the U.S. The bill, named the Unlawful Internet Gambling Enforcement Act, would prohibit credit card companies and other payment providers from processing online gambling transactions. Both supporters and opponents expect President George W. Bush to sign the bill into law in the next two weeks.
Proponents of the measure heralded its passage as a victory for family values and a blow against an addictive vice. Jim Leach, the Iowa Republican who sponsored the bill, said it will prevent casinos from further extending their corruptive reach. “Religious leaders of all denominations and faiths are seeing gambling problems erode family values,” Leach said in a statement. “If Congress had not acted, gamblers would soon be able to place bets not just from home computers, but from their cell phones while they drive home from work or their BlackBerries as they wait in line at the movies.”
But U.S. casinos hoping for a slice of the $12 billion online market aren’t so sure the party is over. They see a reason to celebrate in the language that ended up on the Senate’s cutting-room floor. Unlike the version that passed the House earlier this year, the approved legislation does not explicitly outlaw betting on online casino-style games, such as poker and blackjack. The bill does bar financial institutions from accepting “illegal” bets, leaving the question unanswered as to whether some forms of online gambling are permitted. To date, sports betting is one of the only forms of gambling explicitly outlawed in the act.
The American Gaming Association, which lobbies for the U.S. casino industry, took a neutral stance on the bill, even though several prominent members, such as MGM Mirage, have said they would like to start online sites. AGA president and CEO Frank Fahrenkopf says the organization does not believe the act eliminates the possibility for U.S.-based casinos to open online sites, regulated by states or the federal government, in the future. “This bill did not make anything legal or illegal,” says Fahrenkopf. “What it did was affect the mechanism by which Internet gambling takes place and there is some question as to whether or not that will be effective.”
Indeed, Nevada Congressman Jon Porter introduced a bill in May that would study whether online gambling sites, run by U.S. companies, could be effectively regulated. Fahrenkopf believes that bill is likely to be considered early next year. The measure is backed by the casinos and still gathering support. “It is still Congressman Porter’s intention to move ahead with this bill,” says Trevor Kolego, the congressman’s legislative director. “We hope to pass it, if not by the end of this session, then next session.”
So apparently the bill doesn’t make Internet gambling illegal, it just prevents financial institutions from funding “illegal” bets.
If history is any guide, this bill won’t be effective in stopping gambling. And libertarians should take umbrage at Jim Leach deciding when and where it is appropriate for them to gamble.
The timing of this whole thing is ironic. Does Congress really have the moral authority to pass a law to “protect” Americans from the perils of betting online at their leisure, when at least one member is having cybersex with a teenage boy during a House vote.
The ban ultimately won’t be effective, because people will find ways around it. And it is hard to argue that gambling online is a criminal, as opposed to commercial/regulatory offense, because so much gambling is legal. Hawaii and Utah have some justification in proposing draconian anti-online gambling action, because all gambling is illegal in those states. In other states, it is a far more slippery slope.
If you want to learn more about the history of ambivalent attempts to “ban” gambling, read Cutting the Wire: Gambling Prohibition and the Internet, which takes in the whole history of American anti-gambling action from colonial times to today. And it is directly relevant to this latest law.