Am I the only person not to be surprised by the news that the US government’s extensive jihad against onine gambling has now culminated in outright prohibition?
The Unlawful Internet Gambling Enforcement Act (which now only requires President Bush’s signature to become law) actually outlaws credit card payments or funds transfers from US citizens to ‘illegal’ internet gambling sites and also gives the US authorities draconian powers to extradite non-US citizens suspected of accepting or handling such payments from anywhere in the world.
Online gaming shares have plummeted as a result.
Of course, there are laudable moral reasons for these actions:
Senator Kyl has described online gambling as a unique threat, where “players can gamble 24 hours a day from the comfort of their home; children may play without sufficient age verification; betting with a credit card can undercut a player’s perception of the value of cash, leading to possible addiction and, in turn, to bankruptcy, crime, and suicide; and there is no enforcement commission, such as those that exist in Las Vegas or Atlantic City, to protect consumers from excessive losses or fraud.”
Or perhaps not. More likely is that this is good, old-fashioned protectionism dressed up in save-the-children type rubrics. The real problem is the British and European online gambling sites were rapidly eroding the profits of American casinos and I expect that the cost of buying a couple of senators is a mere trifle in comparison to the potential losses that this foreign ‘immoral’ gambling was destined to inflict.
I expect that the man behind the man behind the man will turn out to be some guy whose middle name is “the”.
This is absolutely and purely protectionism.
It is also a disaster because it is going to prevent the development of prediction markets, which promised to be extremely useful tools.
Fortunately, it will probably be possible for offshore based online gambling and prediction markets to exist, and I hope the US government will be unable to prevent people from using them.
*gasp* You mean to tell me that a government is trying to outlaw transactions that they don’t get to tax? They justified it by claiming they were doing it to “protect the children” to boot? It can’t be; clearly this must be a mistake. No democratically elected government body would do such a horrid thing!
Ok.. my sarcasm tank is down to fumes now…
I’m sure it is a coincidence that on-line gambling on horses, lotteries etc will remain legal and that most of these sites are in US ownership…
Not to mention they sucessfully eliminated competitors to the various state lotteries, which is “good” and “safe” gambling. After all, no one abuses the lottery system by buying tickets instead of necessities, just because tickets are sold in grocery stores, convenience stores and gas stations everywhere.
I wonder if Blair will award the Super casino franchise in the Milennium Dome to Philip Anschutz and his US consortium now?
Silly me, of course he will.
You mean you knew it was going to be crassly tacked on to the end of a ports security bill?
I can’t say I know the legislation thoroughly, but surely it’s not going to be hard to work around? I mean, it prohibits payments being made to gaming operators. Surely all that needs to be put in place is a third-party transaction system (similar to Paypal) which is recognised- coincidentally- by gaming operators compromised by this legislation?
Prohibition in the land of the free? Surely not?
I’m with Frank Fahrenkopf, president of the American Gaming Association, who said:
This legislation, like so many puritanical acts before it, serves only to force the online gambling world further underground or into more inventive ways of securing the lucrative ($6bn per annum) US gambling market.
No doubt. The good folks on Capital Hill (what an appropriate name) are the greatest politicians money can buy.
A non US citizen who is not living in the States can do something that is lawful where he lives and the Americans want to be able to extradite that person to the US to face criminal charges?
It would be unbelievable if Tony poodle had not caved in over the Nat West 3. The bully will get away with it because of the appeasers.
However, the other commenters above are correct. This will just make the casino sites find other ways to attract US citizens’ money.
Sadly I doubt Paypal would want to get involved in the online gambling business as they are owned by ebay who would make a big political target. My hope is that something like this will give digital cash the kick start it needs.
…betting with a credit card can undercut a player’s perception of the value of cash…
This line is the most insulting of all in my mind. The Federal Government does more distorting of perceptions of wealth and the value of ‘cash’ in a day than such outfits could do in a century.
If this protector of man from himself can help me get my mind around the likes of a $46 Trillion debt that the Federal Government has created, then I might have some little respect for his opinions.
I am simply tired of such hypocrisy.
“The good folks on Capital Hill (what an appropriate name) are the greatest politicians money can buy.”
No they’re not. They’re crap. Most expensive whores money can buy, maybe. As far as political ability goes, their low public esteem doesn’t indicate much of it.
there is already a number of third party payment processors that are quite popular.
http://www.neteller.com/
http://www.moneybookers.com/
but many sites like partygaming are still giving up because they don’t want to mess with the US government
Not at all. Silly little organisations like Neteller and Moneybooker can not handle the billions transacted daily through major online gambling organisations like Bodog or Poker.com. Bodog, for an example, handles hundreds of millions per diem through WorldPay, ChemSuisse and Royal Bank of Scotland (yes, the same organisation that owns the Natwest Bank). Oh, and the bill specifically targets third party payment processors so that one kind of falls flat …
Brad,
I knew it was bad but 46 trillion!
That is an absolutely awe inspiring quantity.
That’s 4600 channel tunnels.
WTF did that go on?
I just had to make a calculation even though I am very tired.
If all that cash was in single dollar bills stacked one on top of each other it would make a stack somewhere between 2.86 and 2.90 million miles high (depending on who’s figure you take for the thickness of a bill). Taking a mean figure and assuming the moon to be (roughly) a quarter of a million miles away that’s about 11.5 times the distance to the moon.
11.5 times the distance to the moon!
This has very little to do with protectionism. Any casino with a card room who lobbied for this is ultimately shooting itself in the foot. Online card rooms indirectly (and directly!) encourage players to play in casinos by stimulating interest in poker in a huge number of people who would have normally never gone into the casino on their own. The online card rooms provide a “newbie friendly” learning experience. A casino is intimidating to someone who is unfamiliar with poker, but after playing a few hundred hours online a new poker player very often develops an interest in going to the brick and mortar casino.
That’s how I started going to casinos. There are millions of people literally like me. Poker was not nearly as popular just a few years ago as it is today, and it owes a large part of its popularity to online poker (which complements the influence of TV). Finally, online card rooms like pokerstars.com host tournaments that paid for the entry fees of thousands of entrants into the $10,000 World Series of Poker Main Event this year and for several years back. That is millions of dollars that pokerstars.com has directly contributed to the gaming franchise which owns the WSOP in addition to much larger sums indirectly to all casinos nationally by generating interest in card games.
The most damaging effect that this will have is Fear, Uncertainty, and Doubt, or the FUD effect. This is what is making some online card rooms suspend business with the US and what will cause American players to stop playing and new players not to start playing. There does not have to be a direct negative consequence to deter a large number of people, FUD will suffice, and it will hurt the card rooms and the players who patronize them.
NETeller is already a major transaction method for depositing money because major American credit card companies already don’t allow direct transactions to gambling websites. Many credit unions already won’t transfer to NETeller as it is; this law will have to make it impossible for ANY bank to transfer money to NETeller or ANY online financial third party that also transfers to a gambling website (PayPal already does not allow such transfers). Keep in mind, “only” half of online players are Americans, so the other half of the world is going to continue to want to play and financial transfer services will continue to exist online for them. America is going to have to create a wall on the order of China’s wall, between Americans and our online ewallets like PayPal, and the rest of the world and theirs.
The wall will either have to be a.) flawless (ha ha) or b.) there will have to be a serious threat of something like imprisonment (like China) to stop someone like me from continueing to play on these sites.
Unfortunately, most Americans aren’t as geek as me and fewer still are as determined. The FUD effect alone will shrink the playerbase. I hope I’m pleasantly surprised of course.
Personally I think this is a case of good old fashioned moral values whoring right before an election for the benefit of the superstitious fucktwits in this country. As an atheist who very rarely mentions my lack of religion, I am definitely becoming extremely prejudiced (in a passive-aggressive way) towards religious twats. I’ve got half of the world trying to kill me and the other half trying to nanny me based on their superstitions… all I can say is WTF.
You mean you knew it was going to be crassly tacked on to the end of a ports security bill?
That’s the worst of it. We are used to government bullying of all sorts, but now legislation is cheer-titled with radical new provisions that may be entirely irrelevant to its main purpose chucked into it at the last moment (in the Senate, or the Lords, as the case may be) then there’s no chance of due consideration by the legislature. One might as well be ruled by royal decree.
At least an absolute monarch might actually read what he dictated. It is impossible for a single human being to read and understand the quantity of law produced by modern governments as it appears. Throw away the road map formerly provided by titles, and anything could be passed without one’s knowledge.
It is implicit in the usual conception of the rule of law that the law at least be knowable. Otherwise ignorance of the law is a very good excuse indeed.
There has long been a ‘puritan’ streak in American politics, one which long ago was limited to the bounardies of the individual states until Abe Lincoln wrecked the country and took the powers for the central government. Ever since that time we have had great national experiments in morality from the barrel of a gun. The Comstock laws of the late 19th century; the use of military force against Utah to stop the Mormons from practicing polygamy, a part of their religion; the the Prohibition of alcohol in the early 20th century, followed by the insane and expensively disastrous ‘drug war’ of the late 20th century to the present. Not to mention the pure hatred (and total hypocracy) toward any thing to do with sex (unless in marriage, in the missionary position, for the purpose of making babies and only so long as you do not enjoy it too much).
I play poker on the Internet professionally and so do a number of my friends and online acquaintances. A lot of people I know in the United States have just had their livelihoods outlawed. I live in Australia, so I will still be able to play, but there’s a good chance a lot of the money in the poker economy will dry up as a result of this legislation. If you’re wondering what kind of income we’re talking about, I had a great month last month and made ~ $US 23,000, and there are, or were, a number of people making substantially more than that. I don’t think I’ll be seeing a month like that again in a while, if indeed I can still play for a living at all.
The irritating thing is that the legislation wasn’t even passed democratically. I don’t pretend to understand the ins and outs of how it worked, but Bible bashing creep Bill Frist tacked it onto a port security bill, without a vote being taken on the amendment. As a result, only 2 senators voted against it, the rest frightened they would be portrayed as having voted to allow Osama Bin Laden to smuggle nuclear weapons through American ports.
I disagree that it’s a protectionism issue, by the way. It was primarily a moral issue. If it was simply a protectionism issue, the US government would simply have long ago allowed US companies to run online gambling sites (which has always been illegal).
It is implicit in the usual conception of the rule of law that the law at least be knowable. Otherwise ignorance of the law is a very good excuse indeed.
I’ve been saying this for bloody decades but did anyone listen? Did they f***.
***Brad,
I knew it was bad but 46 trillion!
That is an absolutely awe inspiring quantity.
That’s 4600 channel tunnels.
WTF did that go on? ***
It is the accrual basis debt. It is the present value of the expected outflow over the expected inflow for promises made by the U.S. Federal Government, on top of the $8.5 Trillion borrowed through the treasury. It is the amount that would have to sunk today to meet the actuarily estimated costs of the U.S. collectivist promises. It is 4.5 years total GDP of the U.S. It is based on the same type of assumptions that private businesses have to use under Generally Accepted Accounting Prinicipals in their financial statements.
But the fact that it has not been “spent” in the proper sense only supports the notion of the distortions and sleight of hand by the government. It has made all sorts of promises (the largest addition Bush’s Medicare part D which added $11 Trillion to the accrual a few years ago) that are unfunded, and to actually fund them would require truly confiscatory taxation that would ruin the economy. Yet most people think that they somehow they can have 401k and have these promises too. Personally I am frightened at the plundering that will likely take place from my (and my wife’s) savings to make the sleight of hand workout.
The full details can be found here.
To cut to the chase go to page 27 (31 in the pdf reader). It is the letter by David Walker, Comptroller General, which pretty much lays it all on the line. The most chilling excerpt in my mind-
So as I read it, that would $750,000 for my wife and me TODAY. Trust me, I don’t have it.
And the very legislators who have created this fiction are talking about distortions?
Ah, sure.
Thanks for that explantaion Brad.
I gues if you gamble money, there’s at a chance of a return.
And might I add that it is postulated in some circles that the Western European “Democracies” face a steeper crisis….
Declining birthrates are more steep in Europe, and the U.S., while rangling with immigration, at least has a steady inflow of people looking for a better life, from Mexico et al, who labor, while Europe doesn’t.
Good luck….
We in America are being ruled by immoral, corrupt, lying hypocrites who are bent on ruling the world. This legislation is a small example. It’s going to get alot worse before it gets better. Good luck to all.
Obvoiusly none of you bloke have teenage kids.
On-line gambing screwed themselves by not policing themselves. You need to show a picture ID in USA just to get a frickin’ beer, but any dimwit teenager can ruun up a huge gambling debt and then have a collectiona agency come after Mom and Dad who are considered liable for minors under their roof. Or if you think you just not going to pay for it, you can get threatened with a lawsuit. I know of a family that their dipshit son cost them $5000 they didn’t have.
Sorry guys but I think the on-line gambling goons cut their own bag on this one.
Sorry, but I have a hard time getting worked up over
internet gambling as a human rights issue.
Then of course any economic activity must be equally amenable to state regulation because you (or whoever) cannot be arsed to do what it takes to prevent your kiddies going crazy with their credit cards, but you still do not want to suffer the consequences for your lack of care and attention. So pass a law. Yup, that is pretty much how it always works.
Uain, that is an ad-hominem remark that will win you few friends and even fewer debates. How do you know if the commenters in favour of legalised gambling have kids or not?
Of course, you are the same guy that expressed support for “no-knock” raids on people’s homes a few days ago, in response to the great work of Radley Balko in showing this outrage for what it is. You are a puritanical, naive believer in the Nanny State and alas, the likes of you are currently in charge of the U.S. government and in many other places besides.