Poker Article: Online Poker Regulation Rationale

Midway into the 2nd President Bush term, Congress hastily appended and passed an anti-gambling bill, known as the Unlawful Internet Gambling Act (UIGEA), which was attached to a to-be-passed defense Ports bill. The purpose of the UIGEA was to prohibit monetary transactions from taking place within our banking system, for online gambling-related transactions. This law was never debated in Congress, and it certainly needs to be repealed. Moreover, thte time has come for government to regulate the online poker industry. This article provides online poker regulation rationale arguments.

Simply put, the UIGEA places the burden on the United States banking sector, as its law stipulates that the banking system be responsible for flagging any transactions that are deemed to be gambling-related in origin. A major flaw of UIGEA is that the law does not define what a gambling transaction is and what it isn't, and also does stipulate which companies are deemed to be in the gambling business. Given the current credit crisis that has devastated the banking community, the banks are certainly ill-equipped to attempt to enforce this ill-specified law, and also state that its implementation would require years of effort. Further, the banking system readily admits that it would be next to impossible to distinguish illegal gambling transactions from legal ones (legal ones include carved-out industries such as fantasy sports, interstate lotteries, and horse-racing). Even more ludicrous, the government is expecting the banking system to absorb the entire costs of this law's implementation (that is, for no compensation), and make them culpable for any missed or mis-diagnosed transactions. Given the fact that the banking system has infinitely more pressing issues these days, it is foolish to expect them to have to worry about the details of this law now.

As stated above, the government argues that wagering for online poker is an illegal act, when in fact this law promotes certain carve-outs, which preserve the businesses of lotteries, fantasy sports, and horse race wagering (which are all deemed to be legal). This hypocritical argument stipulates that online poker has always been a "game of chance", whereas lawmakers look the other way when it comes to games like lotto. Clearly, there is some serious government protectionism in play here. Anyone who plays the game of poker knows that there is a chance element, but for the most part, it is clearly a game of skill, much like the game of chess.

Since the largest government deficit and largest national debt amount on record has been achieved by the Bush camp, regulation of online poker should be considered as a potential to be a large source of revenue. Regulation of online poker would result in the taxation of this activity, which could result in a sizeable tax windfall for the government. This, in turn, would contribute to lowering our budget deficit, and help assist in trimming some off the national debt. Many other countries that we are politically aligned with (England, for example) have already implemented a form of regulation for internet gambling, and the supporting technology to accomplish it, has reached a very mature state. Surely, the United States, could benefit from such alliances, and learn the ins and outs of regulation, to help save time and eliminate pitfalls.

A major reason that the United States has not considered legalization and regulation of online poker, is that there are strong governmental ties (lobbyists) to the casino industry. Land-based casinos have cried the blues about how online poker and gaming has cut into their revenue, and additionally, it is well known that many land-based casinos are already working on plans to put their casinos on-line (in anticipation of its eventual legalization). Proponents of the UIGEA have attempted to eliminate any foreign-based online poker sites, to help cater to these land-based casinos. This is extremely evident in that many of the UIGEA governmental authors have publicly taken contributions from land-based casino organizations over the years.

Another reason given to the public for UIGEA's passage, is that there is a belief that online poker fosters underage gambling. This, in turn, destroys morale in our country, according to the UIGEA proponents. Again, this is an extremely hypocritical argument coming from those that encourage online horse-race betting to occur. Further, current technological efforts permit scrutiny of online poker participants' age, and will rightfully refuse access to sites, where a player is underage.

Yet another argument in favor of regulating online poker, is the current government dictating to its citizens what they can and cannot do with their own money. The current regime has clearly forgotten about the issue of freedom of speech here. Moreover, the government is attempting to control the Internet, which has no national or international borders. If prohibition to online poker sites is mandated, what will be next ? Maybe the government should tell us exactly what we can and cannot view on the Internet, over and above online poker ?

In conclusion, legalization of online poker is necessary, and the UIGEA, although weak in substance, needs to be overturned. With President-elect Obama waiting in the wings, the prognosis for this occuring is encouraging to say the least.