Friday, October 20, 2006

The Latest Attempt to Criminalize Internet Gambling...

Why is the government always the last to learn the lessons of history?

Last week, Congress passed its latest law to criminalize internet gambling. This time, rather than go after American citizens engaging in their "subversive" behavior (which has thus far proved futile in cyberspace), and rather than go after the online casinos (also virtually impossible since most online casinos are located outside the U.S.), Congress, in its infinite wisdom, has decided that the true culprit of internet gambling is, obviously, the credit card companies. Specifically, the law makes it illegal for banks and credit card companies to process payments to online casinos - though not all online casinos; only those that are on a list the government will prepare.

Man, where to start?! Columnist George F. Will describes the law as "Prohibition II", and accurately predicts that this law will be as effective at stopping people from gambling online as the first Prohibition was at stopping Americans from drinking alcohol. Is there really any rational person alive who truly believes this will work?

Just who exactly stands to benefit from the law? Not the bricks-and-mortar casinos who, despite facing competition from cyberspace, have come out decidedly opposed to the law because 1) they never see a government intent on regulating their industry as a good thing, and 2) online gambling has actually proven to "wet the appetites of millions for the real casino experience".

Look closer and what we see is political posturing to social conservatives three weeks before the midterm elections. After all, does it raises anyone else's eyebrows that the law was passed 32 minutes before Congress adjourned for the year? Will suggests that the law is designed to protect the state governments' monopolies on gambling - 48 states have legalized some combination of state-run lotteries, casinos, video poker, etc. This law is simply an attempt to make sure that when people choose to gamble, they are losing their money to the State, rather than to private casinos.

The government ought to heed the lessons of history. First of all, it has proven quite futile to criminalize this type of common behavior that most Americans view as, at worst, a guilty pleasure. Second of all, even if the government is determined to eliminate internet gambling, surely going after the credit card companies isn't going to get the job done.

Here's a thought: why not make online gambling legal, and regulate it? The tax proceeds could help finance our spiraling national debt and reduce the annual budget deficit. Unlike existing state-run lotteries, online gambling wouldn't even be a regressive tax on the poorest Americans, since most online gamblers tend to be in the higher income earning tax brackets. This is not even to mention the "freedom" argument, that people should be free to spend their money how they want.

All of which might sound great to rational people. But try telling that to a government intent on pandering to social conservatives and protecting state-run monopolies.
  

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