I know there are more important things going on in the world, but the Internet Gambling Enforcement Act of 2006, recently signed into law, really has me steamed. And not only because it has caused one (but, fortunately, only one) of my internet gambling sites to close out my account.
There are many grounds upon which one might say that particular laws are "bad," and this one seems to have all of them in one package. Let's see, where to begin? ...
First, it will not work. It is already not that difficult to evade the law's restrictions — if you get some form of e-cash, you can transfer that to and from offshore gambling sites without restriction. It's not all that easy now to do that — but I guarantee you that it will be a whole lot easier a year or two down the road. Duh.
I'd gladly stake $100 on the following proposition:
"The total dollar volume of online offshore gambling originating in the U.S. will be substantially greater in 2011 than it is in 2006."If there's anybody out there silly enough to want to take me up on that and to $100 on the other side, let me know.
Second, it perpetuates a truly insidious form of State regulation that would be laughable if it were not so nasty. There's a very good reason that Jack Abramoff's client list consisted primarily of people in the gambling business — there are prodigious opportunities for monopoly rent-seeking in the current regulatory scheme. Like: get yourself designated an Indian tribe, and you're on your way to riches. Third: to the extent that there really are people for whom gambling is a real addiction that is destroying their lives, this will insure that they go underground (see point 1) and find ways (which will be readily at hand) to gamble in untraceable ways.
Fourth: It is incomprehensible gibberish. Take a look at the law and try to read it and understand it. Really. This is your law, after all (at least, for those of you logging in from the US). Yet I suspect that there isn't one person in a thousand who could make sense of this document in a reasonable period of time. What does it mean? When law becomes incomprehensible to those supposedly subject to it, it ceases to be law anymore, at least in my book ...
Fifth: It discriminates, in a rather nasty way, against the poor — it doesn't stop anyone from going to Las Vegas to do all the gambling they wish, but if they want to do that without the expense of traveling, no go. Sixth: It is protectionist (and quite probably a violation of our international obligations under the GATT) — the whole purpose is to disadvantage overseas businesses and advantage domestic providers.
Seventh: it is unconstitutional. Well, I'm not so sure about this one, I admit. But here's my argument: it would clearly be an abridgement of my constitutional right to travel for Congress to pass a statute prohibiting me from going to the UK and participating in (legal) gambling while I was there. The Act, in practical effect, does the same thing. I know it's not really "travel" when one "goes" to an offshore website. But the rationale behind the constitutional right, it seems to me, is as applicable here as in the "physical travel" realm.
Related Posts (on one page):
- More on Internet Gambling:
- Hello, I'm David, and I'm an Internet Gambler:
Oh, I don't know about that. The government already prohibits you from traveling abroad for the purposes of under 18 prostitution, even if its legal in the country you go to. So if you want to enjoy 17 year old prostitutes say, even if its legal in the country you go to, you just committed a crime under U.S law.
The gambling scenario you describe above would fall into the same category.
I'm not aware of the law you describe -- can you give me the citation for it or point me to something describing it? DavidP
What kind of odds are you giving? Don't know why I should be giving odds -- but what the hell, I'll give you 2-1. DavidP
I don't understand your constitutional argument. Under your rationale, as I understand it, it is an unconstitutional violation of the "right to travel" to regulate anything online unless it is regulated in every county in the world. Surely that can't be right; the right to travel is a right to TRAVEL, not a right to do things that you might do if you traveled.
Fair question. But why is a right to travel a "right to TRAVEL," as you put it? That is, what is the source of the right? What's the functional, relevant difference between my going to the UK and plunking down my money, and sending my bits to the UK to do that for me that would explain why one is constitutionally protected but the other isn't? davidP
Well yes online gambling can make a gambling addict loose money even faster, but is it the job of Big Brother to ensure that this doesn't happen? I hardly think so. If someone wants to ruin their life by gambling away all their money they did it before online poker and they will do it after online poker.
So...government please stop making laws to protect us from ourselves (ala the seat belt "click it or ticket" laws I am so fond of).
Which raises an interesting question. Is Tradesports' current events market covered by the new law? I haven't had time to look into it.
My prediction is that we will see a big uptick in American citizens setting up overseas bank accounts, where transfers to and from gambling sites won't be illegal.
I agree completely. DavidP
-Matthew
There is, indeed, a highly protectionist angle that wouldn't be bad at all for gamblers like David; if we allowed domestic companies like Harrah's to get into the online gaming business, we could tax and regulate that business, and customers would have the added security of knowing their money was in the hands of an American corporation as opposed to some shady offshore operation. However, it's not clear to me that this bill was passed to assuage business interests as opposed to social interests (i.e. people who find gambling immoral).
It's somewhat amusing, though, to watch online poker players, most of whom care very little about politics, suddenly decide that Bill Frist is the devil.
Isn't the constitutional right to travel (from Saenz and other cases) generally construed as a structural/priv. &imm./due process/equal protection right to interstate, not necessarily international travel? On the other hand, you have the old "no constitutional right to go to Baghdad, but the government can't ban you from going except by means consistent with due process." Perhaps there's a good argument that the ban is arbitrary and capricious, but I doubt it. (Stupid, yes, but arbitrary, no)
And this... this isn't travel except by the most specious arguments. I'm surprised this made a top level post here.
For moral legislation, I'd make tobacco a higher priority.
As an online gambler, I am more than a little taken aback by the passage of this law. I may actually move. So much for land of the free.
I am tempted by the 100 proposition, but hope that in 5 years, we will have righted this apparent wrong. I would be willing to take the other side of that if you change 2011 to 2007 or even 2008.
If they really are concerned about addition, why was no money allocated to help treat those with the addiction?
Here are links to two site from lawyers who specialize in gambling
Chuck Humphrey
Internet Gambling Funding Ban
I. Nelson Rose
2006_act
Note that some of the sites which are used to transfer funds are complying even though they are out of the jusrisdiction. The latest being Neteller, which announced today that they will compy (although will take some time).
Neteller Update
Seen recently on a bumper sticker
"If you aren't outraged, you haven't been paying attention."
Raich seems to say otherwise.
"My prediction is that we will see a big uptick in American citizens setting up overseas bank accounts, where transfers to and from gambling sites won't be illegal."
My understanding is that sites will still be liable if you access them from the US as a US citizen. Simply setting up a foreign bank account (which will need to be reported, BTW, even if it is a non-interest bearing account, and which, according to my accountant, would increas the likelyhood of an audit) would not be enough.
"I don't think there's a viable constitutional argument, but opponents of this bill are pursuing an alternative route via the WTO and may have a reasonable chance of success."
The US has already basically told the WTO to go screw itself of this matter. The WTO already had ruled against the US in a complaint filed by Antigua and Barbuda.
WTO ruling
I think this one is easier reading
WTO ruling discussed
Officials from Antigua and Barbuda were here right before we passed this law talking to people about how to work it out. Needless to say, they are less than thrilled about the passage of the law, and can only feel that the recent discussions were held in bad faith.
Antigua previously challenged under the WTO dispute mechanism the U.S. legal regime for online gambling that existed prior to the new legislation. Their complaint was successful. Antigua is now pursuing a follow-up complaint, in which they are arguing that the U.S. did not implement the earlier ruling. In addition, Antigua is likely to amend its complaint to challenge the new law as well. The EC may join in with their own complaint at some point.
As far as the practical consequences this bill is horrible. Others have already noted that this prevents effective propholactic measures for problem gamblers as the government no longer has any leverage to enforce loss limits or otherwise prevent victimization.
More problematically is that these sort of bills nurture an underground cash economy and drive normal law abiding folks into its arms. For the most part companies like e-gold and other offshore cash substitutes are rarely used and likely untrusted by most citizens and merchants. This bill guarantees that many merchants will start accepting these kinds of payments and a large swath of society will become comfortable using them.
At the moment the small numbers using such services make it difficult to hide criminal transactions using these offshore cash equivalents. Once large numbers of people start using them for gambling the real criminals can hide their transactions in a forest of harmless gambling accounts. Not only with this make it easier for the terrorists it will lower the barrier to activities like buying child porn. Right now moving over from the world of licit porn sites to buying child porn is a big step. Having to go buy e-gold or some equivalent and evade normal payment methods makes it seem shady and diffiult. Once people have e-gold (or whatever) handy and are used to using it to pay for illegal but morally acceptable services like gambling it is a small step to subscribe to some child porn site in russia.
Ahh well, what did you expect from a country with drug laws like ours.
As far as this buisness about 'land of the free' it hasn't been the case for many years that the living in the US gave you the most practical freedom (drugs, obscenity etc..). However, what makes the US different is the far stronger protections against taking away freedom (why we insist on letting nazi's march). Even if right now european countries are more 'free' in some sense than we are I think it is far easier for them to slide into (more) censorship and personal restriction if it becomes socially popular.
-dk
I'm too lazy to go back and find the paragraph, but the law specifically makes an exception for in-state gambling over the internet. (One reason for this is that Casinos in Nevada use the internet for many transactions--the Casino chains, for example, link all their slot machines together for the high payout wins.)
As for the law in general, my initial knee jerk reaction has been that it's nanny-statism. While still true, upon reflection, I think it's pure protectionism wrapped in the cloak of self-righteousness. States want to protect their lotteries and horse gambling and Nevada, New Jersey, etc. want to protect their casinos.
About the only truly "moral" parties in all this are the senators and representatives from Utah, where all forms of gambling are illegal. (Though Senator Hatch is still a self-righteous goon.)
All that aside; the electorate should be upset since taxing sin is a great revenue maker. (Yes, I'm also for the legalization and regulation of prostitution and the decriminalization of drugs.)
David Letterman on the law
D.L. on the law 0:28
Comedy Central showing (and commenting on) Sen. Ted Stevens (the head of the Senate Commerce Committe which regulates the internet) explaining the internet in ways that only a drunken 5 year old could understand. This is from July 12, but gives a good perspective on how people in his postion view the internet.
Internet tubes 5:05
and finally, Rep. Shelley Berkley on the addition to the Port Securities bill. Of course, she still voted for it.
Rep. Berkley 2:47
Ridiculous.
How about consuming child pornography on an internet site maintained in an area of the world where child pornography is legal? (I don't even know if such a place exists--I hope not--but the point is the same regardless.)
betwagerstrongly aver that this single bill has toasted Frist's political future.So this:
... is not a good way to measure the effectiveness of the law. If the volume in 2011 is lower than it would be in 2011 without this law ever having been passed, then the law will have at least sort of "worked".
Not really--they don't want the competition for people's gambling money.
Of course, the state legislatures that pass lottery laws are not the same as the Legislature in DC that passed this law. But it is certainly not beyond the power of lobbyists for an particular industry or sector (including, say the state lottery commission) to lobby both at the state and federal level.
And, if I had my way, we'd be shutting down Las Vegas and all the Indian casinos too. Gambling is a scourge.
Won't work. Just as what is happening now online casino's are just going to move to e-cash type solutions. Since you have to establish ability to pay upfront no problem.
You might try to make the e-cash companies unable to take credit cards or otherwise liable but this just becomes impossible. Either you end up just banning any financial accounts with oversea's banks or people can just push their money through two accounts, i.e., first put money in some English online cash equiv company and then transfer it to a second account which lets them gamble with the money.
Which is why horse racing and casinos and lotteries survive.
Probably what's considered gambling will reflect its laundering potential.
(Laundering : you pay the guy by letting him win.)
This might be a bad law, but you've got to come up with better arguments than these.
You're $100 proposition at (apparently) even money might be worse for you than you think. Although I agree that, ceteris parabis, you have the good end of the wager, another possibility is that the U.S. legalizes online gaming within the next five years, thus generating massive domestic online casions that cause a huge reduction in overseas gambling houses getting U.S. money.
Effectivelt, this is turning yourwager into the following quesiton:
I'd gladly stake $100 on the following proposition:
"The U.S. will not legalize online gaming in the next five years."
I'm not so sure you want to lay 1:1 on that. Many bans of this type have been quickly followed by legalization.
just my $.02
matt
Doesn't Kent v. Dulles at least imply otherwise?
The right to travel is a part of the "liberty" of which the citizen cannot be deprived without due process of law under the Fifth Amendment. So much is conceded by the Solicitor General. In Anglo-Saxon law, that right was emerging at least as early as the Magna Carta. Chafee, Three Human Rights in the Constitution of 1787 (1956), 171-181, 187 et seq., shows how deeply engrained in our history this freedom of movement is. Freedom of movement across frontiers in either direction, and inside frontiers as well, was a part of our heritage. Travel abroad, like travel within the country, may be necessary for a livelihood. It may be as close to the heart of the individual as the choice of what he eats, or wears, or reads. Freedom of movement is basic in our scheme of values.
Every country restricts who can enter, but only totalitarian states prevent people from leaving.
Seems to me it just business as usual, classical monopoly seeking and rent seeking.That preference, as a general inclination toward preference for some prohibition, not as a particular preference, is the key that makes all such moral crusades into big winners for politicians, rent seekers, preachers and mobsters.
The list of evil and immoral personal behavior with characteristic and easily demonized participants which threaten to end Civilization As We Know It (tm) is endless. In no particular order:
1. Tobacco
2. Guns
3. Pot smoking hippies
4. Drug addicts
5. Gambling
6. Alcohol
7. Fatty foods
8. Sweet foods
9. Meat eaters
10. Ponography
11. TV
12. Rock 'n Roll
13. Homosexuals
14. Fur coats
15. Automobiles
16. The Intarweb
17. Evolution
18. ???...
The pitch is always the same: "They're destroying our way of life and threatening our families and children."
The electorate's response is always the same: "Yes, we must stop this Evuuuullll!" or "Well, I don't do that so psssing a law against it won't bother me. Besides, some people get hurt by this thing so maybe the law will do some good."
The effects of passing the law are always the same: Lock up lots of people who haven't harmed anybody except (arguably) themselves. Give lots of tax money to politicians' favorite rent seeking pals. Politicians crow about the number of people locked up, and characterize them as members of some group culturally despised by their electorate. Trot out penitents to sob "the law saved my life". Crusade for an even bigger "crackdown". Vitiate constitutional protections to make the law even easier to enforce more broadly. Expand the scope of the law in any way possible.
Rinse and repeat.
As long as enough voters itch for culture wars, this particular disease of democracy will remain endemic. One endgame is that 50% plus 1 of the population keeps the other 50% minus 1 locked behind bars. A more desirable endgame is that any politician proposing such prohibitions is hooted off the podium.
I quit because not a small portion of the software is crudely and brazenly crooked, and because if I did win, payment, if it was made at all, took weeks or months and was typically drawn on some Maltese or Bulgarian bank.
I would certainly consider playing again if there was regulation and payments of winnings were timely made.
Under theses circumstances, I'd be more than happy to contribute to the benefits of casino shareholders and the concommitant government tax rolls. I'd also, if I won, not worry about concealing any gaming income.
Prohibition didn't work, but that hardly seems like a reason why people shouldn't have complained about it.
This is akin to suggesting that speed limits are bad because car makers stop selling race cars to the public, or underage porn sites go out of business. You may not like it, but what you were doing is not legal anymore. Suggesting the law is bad because it's enforced and that enforcement happens to inconvenience you is nonsensical. It's like illegal immigrants protesting not our immigration laws (which they know won't change) but the fact that politicians are actually trying to enforce them.