Thank You for Gambling

Published December 1, 2006

In the recent movie “Thank You for Smoking,” the hero–a tobacco lobbyist–comes under fire for working to protect people’s right to smoke.

A similar movie could be made about gambling. The villain would be Rep. Bob Goodlatte (R-VA).

Goodlatte has been fighting to enact legislation on Internet gambling for some time, and he can now finally claim a good deal of success with the passage of H.R. 4954, a port security bill with an anti-Internet gambling attachment. Goodlatte’s Unlawful Internet Gambling Enforcement Act (UIGEA) is set to make it illegal for American banks and financial institutions to process online gambling payments from the U.S.

Finding a Way

“The passage of this legislation is a step in the right direction in the fight against online gambling and will help to cut off the money supply to these illegal outfits,” Goodlatte said. It is true enough the legislation makes banks suffer the wrath Goodlatte feels towards the online gaming industry, but a key question remains: Will tightening the rope around bankers’ necks really stop online gambling?

Following passage of UIGEA, gaming companies took a beating. PartyGaming, the world’s largest online gaming company, fell out of the FTSE 100 while World Gaming suspended dealings in its shares due to “uncertainty over its ability to continue trading.”

Most of the world’s online gaming firms are not located in the U.S. due to government hostility, but now it appears that even those based in London and elsewhere are subject to America’s dominance in a global economy.

That’s only the short term. In the long term, people who want to gamble online will find ways to do it, even if it means they have to visit shady spots on the Web. Government policies that push innocent consumers into potentially dangerous black markets are misguided and harmful.

Goodlatte’s bill should also shame his supporters because it hypocritically exempts large parts of America’s gambling industry, including government-run lotteries.

Bad for Consumers

By cutting out new competitors, the bill has the effect of pushing the gambling market in a monopolistic direction that will only abuse customers. Of course, this problem may disappear as other countries make online gambling more widespread and European gambling firms sell out to U.S. firms with lobbying power.

The British government already has cut betting taxes, and next year officials plan to legalize and regulate online casinos. This will legitimize the business and may jumpstart the sector. At the same time, if it turns out analysts are correct that U.S. firms are looking to buy up some of the dying European gambling sites, then there might be serious pressure for Congress to amend Goodlatte’s bill. That would be a positive sign for a country that prides itself on freedom and wants to continue in that direction.

It is not the role of government to dictate what individuals can and can’t do for entertainment, so long as their actions do not harm others. Some people enjoy gambling in their spare time and that is their business, not Bob Goodlatte’s. His legislation, in the long run, is not only burdensome but ineffective.

Gambling addictions can be harmful, but that is an argument in favor of education and perhaps some government oversight of casino behavior. It is certainly not an argument in favor of outlawing online gambling while real-space and government-run gambling continues.

Sonia Arrison ([email protected]) is director of technology studies at the Pacific Research Institute. This article is reproduced with permission of TechNewsWorld and ECT News Network.