Internet Gambling Update

In a last-minute, back-room deal, Congress sneaked provisions designed to make it harder for Americans to gamble on the internet into a port security bill, which passed last Friday night. The Poker Players Alliance's press release has more:

"This last minute deal reeks of political gamesmanship. The American people should be
outraged that Congress has hi-jacked a vital security bill with a poker prohibition that nearly three fourths of the country opposes," said Michael Bolcerek, president of the Poker Players Alliance, a grassroots advocacy organization of more than 110,000 poker enthusiasts. "Allowing this bill to become law, would run contrary to public opinion and would damage an already fractured relationship between government and the electorate. The millions of Americans who enjoy playing this great game will have the last voice in this debate come Election Day."

Bolcerek pointed to research which shows that 74 percent of Americans oppose federal
attempts to ban Internet poker.

The PPA also has a brief analysis of the legislation.

At Dispatches from the Culture Wars, Ed Brayton explains why the law will be ineffective:

You can transfer money to Neteller, either directly from your bank account with an online check or wire transfer, or with a credit card, and they will transfer it to the gaming site. If you want to cash out, they pay it in to your Neteller account and you can then transfer it to your bank.

How this new bill will affect Neteller is still up in the air. Neteller, like Paypal, facilitates exchanges for a wide range of things, not just online gaming sites. And because Neteller is an offshore company, located on the Isle of Man, there is no way for the banks or credit card companies to know which money sent to them is then sent on to a gambling site and which money is used for other, non-regulated purchases. The best case scenario is that the banks continue to transfer funds to such services for that reason; the worst case scenario is that they cut off all transfers to such services completely (or Neteller decides on its own that it better not accept transfers from American banks, as some online gambling sites have done).

But even if the worst case scenario comes true, will this really stop money from going to and from the gambling sites? Nope. What will happen is that people will have to transfer those funds to offshore banks in Canada, the Cayman Islands, or elsewhere. As long as there are millions of people wanting to transfer such funds, and willing to pay a 3% charge to do so, someone is going to facilitate those transactions. All this bill will do is force players to build one more intermediate step into the process: send money to an offshore account (such transfers are perfectly legal), then from those accounts to the gambling sites or to Neteller and then to the gambling sites.

At Hit and Run, Nick Gillespie writes:

Arguably the most idiotic element of the new legislation, which would clarify what has been a gray area for a very long period of time, is that everyone involved knows that it's only a matter of time before online gambling is made fully legal in the U.S. As Greg Beato wrote in our May issue, legalized gambling has already moved from the Vegas Strip to Main Street. The question isn't if online gambling will be allowed, only when.

I certainly hope Mr. Gillespie is right. In the meantime, this new law shows the contempt that the Republican-controlled Congress has for its constituents. Not only do the Republicans want your bank to babysit you on behalf of the government, they sneaked this legislation through the back door rather than put it to a full and open debate. As disappointing as congressional Democrats have been in recent weeks, I can't wait to vote a straight Democratic ticket this fall.