Posted by
Rich Muny on Monday, March 23, 2009 8:00:00 AM
Rich Muny
March 23, 2009
Online poker is available in every state in the Union, and millions of poker enthusiasts enjoy participating in these games from the comfort of their own homes. However, due to vagaries in federal law, these poker sites are all located offshore where they are not licensed, regulated, or taxed by any state or federal entity. It’s time to end this by placing this industry within the reach of U.S. law.
U.S. licensing and regulation of the online poker industry are needed to mandate age and identity verification, to require providing of services and self-exclusion lists for those with excessive gaming habits, and to provide consumer protections. Poker sites comply voluntarily now, but licensing and regulation would give U.S. laws the teeth needed for enforcement. Licensing and regulation would also provide for collection of taxes and licensing fees from sites, as well as income taxes from winning American players. Most importantly, licensing and regulation would move a significant part of the industry onshore, bringing jobs and revenue with it.
Online poker has been available worldwide for over a decade. Many nations – including most of those in the European Union – have insisted on licensing and regulation. The U.S.– perhaps wishing to build on the “success” of Prohibition – has instead chosen to try a prohibition that forces banks to stop some online gaming transactions. However, it is not at all clear which forms of non-sports online gaming are to be included. Chad Hills, a gaming research analyst for Focus on the Family Action,
states the following about the current legal situation regarding online poker:
The U.S. Department of Justice maintains that all forms of online gambling are illegal, based on the 1961 Federal Wire Act. Contention exists, however, about the intent of this law, as the Fifth Circuit Court of Appeals ruled that the Wire Act only applies to sports betting – not to other forms of online gambling (emphasis added). Forbes online claims the online gambling industry exploited U.S. laws because of their ambiguity - lack of clarity: "... hundreds of companies have been exploiting the fact that U.S. laws on online gambling are as hazy as your classic, smoke-filled casino."
The economic downturn is affecting casinos, but not online wagering. The Las Vegas Strip saw a 15 percent decline in gambling revenue in January (2009). And betting proceeds in Atlantic City reportedly were down 19 percent last month. But online gambling revenue is up — surpassing $20 billion in 2008.
It is clear that current federal laws most likely will not be held to include peer-to-peer games of skill like poker. It is equally clear that Congress is unlikely to expand this any day soon, especially as that would threaten the many exemptions Congress placed in UIGEA for other forms of online gaming. Also, poker players have organized and are standing up for their rights. The
Poker Players Alliance now has over one million members. They are winning cases in state courts. They are motivated, they are lobbying Congress, and – they vote.
Even if prohibition were attempted, it would be guaranteed to fail. There are too many motivated poker players who would find ways to play. While playing, they would continue standing up for their rights while voting against anti-poker politicians. Regulation, on the other hand, would work. Players would naturally gravitate toward sites authorized to offer services in the U.S., as these sites would be perceived as being safer. Thus, market forces would drive compliance.
The current situation is unacceptable. It’s time to stop pretending that online poker will one day be prohibited throughout America. It’s time to stop kowtowing to those who prefer an ineffectual, fanciful prohibition to facing reality. It’s time to stand up for America’s families and children by insisting on law and order. It’s time to step up. It’s time to license and regulate this industry now.
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