By Simon Fitzpatrick 6.12.13
The country that gave birth to Las Vegas and Atlantic City currently has a strangely puritanical streak when it comes to online gambling. While the law doesn’t expressly forbid gambling or the various casino games themselves, it does focus on electronic financial transactions, which puts online poker companies at a clear disadvantage in relation to the brick-and-mortar version.
It’s Not About Morality
Many would argue that the law is structured thus simply to stop the online firms, with their low costs and relative ease of set-up, from wiping out the real-world casino industry. There’s clearly no moral imperative behind the government’s thinking; if there were, poker and gambling in general would be under much tighter control, or banned altogether, as in Utah.
As the online firms try to find loopholes in the laws that ring-fence their activities, more and more applications to build real casinos are being approved. 48 states allow gambling in some form. Pennsylvania is one of the hotspots for new casinos at the moment, having recently allowed slot machine parlours. New York and Maryland have new buildings on the way, and discussions are ongoing in Illinois about expanding the casino sector.
Prohibition Doesn’t Work
Proponents of strict control of online poker argue that it protects children and vulnerable people (e.g. problem gamblers). The counter-argument is that prohibition, as has been proven time and time again in the US, is an extremely ineffective way of controlling behaviour. The question of the rights of the individual to engage in activities of their own choosing is another one altogether.
The issue that may eventually settle the matter is this: is the complexity and draconian nature of US law damaging the economy? In short, is there money in changing it? A 2011 paper published by the University of Iowa would suggest so. It points out that “lawful activities are easier to tax and control”, that legalisation would allow state and federal taxes to be collected, and that licensing of operators would lead to a more secure experience for the user.
Revenue and Regulation
The paper quotes figures (which by now will be much larger):
“In 2000, Internet gambling revenues reached a total of $2.2 billion worldwide. Consumer spending on traditional gambling generated $61.4 billion for the U.S. economy in the same year. Of the $61.4 billion, over $20 billion went to the government because of gambling privilege taxes.”
The experience of online poker in Britain, at sites like GamingClub.co.uk, shows that legalisation allows regulation of the industry and huge revenues for the government. Perhaps it’s time for the US – which clearly isn’t giving up gambling any time soon – to rethink its online policy.
(Images courtesy of pokerupdate.com, wonder-punter.net, rungoodgear.com)