Resolving the online gambling issue


The online gambling debate in the United States raged on this week as the House Judiciary Committee listened to testimony from both sides during a hearing Wednesday.

Before introducing the topic and the members of the first panel of speakers, Chairman John Conyers Jr. opened the hearing with the statement that "gambling is a social evil," which didn't bode well for those who hoped the committee would give an unbiased ear to the testimony.

Social evil or not - and I have to say I lean toward the "not" - a lot of good points were made with regard to adults being allowed the freedom to choose to gamble online if they want to.

If those responsible adults are afraid of the social ills of gambling, they have the choice not to gamble online, just as they have the choice now not to visit a brick-and-mortar casino or pick up a deck of cards at home to start a friendly game of poker.

There is also plenty of technology out there to help keep underage people from gambling. And as Annie Duke so candidly put it during the hearing, if children are stealing their parents' credit cards to gamble online, perhaps there are more problems with that family than just underage gambling.

Basically the usual arguments were raised for and against online gambling. Yes, people think it's morally wrong to gamble and creates social evils. On the other hand, people have the right to choose to gamble their money away if they want, not all of the games banned by the laws are purely games of luck, and the nation is in violation of international agreements with the ban.

A more interesting, less-discussed question is whether Internet gambling should even be considered a federal issue. The states have always had the right to say whether or not they wanted to allow gambling within their borders.

The majority of the states have some form of legalized gambling. Not all of them have casinos, but there are lotteries, bingo halls and more. The exceptions are Hawaii and Utah.

In at least one case, a state has already outlawed online gambling. Washington has a law in effect making it illegal for its residents to gambling online. Massachusetts appears to be working on the same sort of law - though it is more self-serving in its purpose, because the proposed bill would create casinos in the state but outlaw online gambling to curb competition for them.

I do believe states should be able to retain that right. It's one of the founding principles of the United States that the individual states reserve the right to govern themselves, with the overall federal government taking care of issues that are important to the nation as a whole.

That being said, online gambling isn't something that can be contained easily within state borders. Because of the nature of the Internet, it may be a state issue of whether or not they want to allow gambling, but the federal government will need to provide overall guidance for the industry. Otherwise you may end up with all the states setting their own rules and regulations so that it becomes nearly impossible for banks and other financial institutions to determine what is a legal online gambling transaction and what isn't.

Wait - isn't that basically how they're saying it's going to work now?

The way the Unlawful Internet Gambling Enforcement Act was set up, banks and financial institutions will be in charge of making sure only legal online gambling transactions, as determined by the states, are permitted. The bill doesn't actually set up any rules for what is and isn't legal, because it is leaving it up to the individual states' laws.

That's going to be difficult when many states don't have a specific law on the books pertaining to online gambling. Perhaps the banks will just assume that if they allow other forms of gambling then online gambling is legal in those states as well.

The other side of the equation is making sure the online sites are legal where they're located. It might be argued, though, that determining if a business based in an entirely different country is legal there is above and beyond a bank's authority or capacity.

But, really, the point to consider here is that the federal government has already stepped in to basically tell states this is how to enforce the ban, so what's the difference between that and stepping in to regulate the industry for the entire nation?

If the Judiciary Committee and other members of the government can see past their own moral objections to gambling and look at the issue from a purely logical standpoint, they must recognize that it's become way overcomplicated. There's no way telling people they can't gamble because it's "for their own good" is going to work. When has it ever worked, especially for an entire nation?

What will work, however, is for the federal government to provide an overarching set of regulations for the online gambling industry if it wants to do business in the United States. It does that for plenty of other businesses and industries in the nation.

The main regulations that most people would agree on have already been discussed:

  • Proven, effective methods for preventing underage gamblers from accessing the online gambling sites
  • A way for problem gamblers to exclude themselves from being able to gamble online
  • A system to exclude residents from states that prohibit online gambling
  • Provision for federal and state taxation, with some of that money earmarked to help problem gamblers

Once the federal government has the regulations and licensing system set up for the entire nation, then it's just a matter of the states choosing whether or not they want to allow it. There are still going to be states that opt out and the people may vote to keep a ban in place, but at least they'll be given that choice.

That leaves the United States in compliance with their international trade agreements, and still leaves power with the states as well. Everyone goes home happy ... to be able to play a few hands of poker online if they want.

Related Article: Judiciary Committee Hears Net Gambling Testimony

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