Potential Bill Will NOT End Internet Gambling

[webmonarch]

Ok, I'm sorry to have to do this, but I must. There seems to be a lot of worry about this potential legislation being passed. This needs to stop.

First: Establishing my credibility. I interned in a Senate Member office in the Fall of 2001. I am a recent law school graduate (though not a lawyer, bar results pending) and I have worked in the Department of Justice, Federal Trade Commission, and the Department of Commerce (i.e. executive enforcement agency). So, I have some experience.

Let's talk reality:

1. Previous versions of this bill have failed prior to this one. There is nothing in this bill that makes it amazingly different from the others.

2. This is not the type of thing that ANYONE will go all out for. That is, if something needs to be cropped to get some riding bill through, this would be the first to go.

3. I personally think this is just an example of political ballyhoo, so this radical right-wing sponsor can impress his radical right-wing constituents. Half his district hasn't seen a x386, let alone Internet access. He'll huff and puff, and really won't care if it passes or not so long as he looks good in the process. This kind of bull happens all the time, which is why our country is in such a shithole right now.

EVEN IF THE BILL PASSES:

Ok, let's really talk turkey. Say it passes:

1. First, someone is going to have to care enough to enforce it. By someone, I mean DOJ or Homeland Security or FTC or whoever would handle this stuff. These agencies tend to not give a [censored] as to what Congress instructs, unless they really get pushed with a lot of political pressure.

Our example here is jaywalking. Yeah, its a law, and you could get cited for it, but everyone involved, including you, crossing the street on the red light, and Mr. Police Officer, apparent enforcer, knows that the effort it takes to enforce the law is a pain in the ass relative to the "criminal" activity going on. Thus, no enforcement. You'll likely see the same thing with this law.

"But wait!" you say, "what about the millions designated for enforcement?" Well, ignoring for a second the pure insanity of taking tens of millions of dollars away from needs such as Katrina, the National Debt, Iraq, and about 30,000 other more pressing needs, budgets are made to be broken. The money will go to a particular agency. Maybe they use a bit to really look at enforcement. More likely, the funds get rolled into some other project rationally related to the Bill's purpose, and the Agency does what it wants with it.

2. OK, let's say things go really bad. The law passes, Agencies want to enforce it, etc. Here comes the fun.

How do they enforce? Let's look at options.

i. They can attempt to enforce as against the sites. This would go nowhere extremely fast. Sites are all off-shore, no funds stored in US, etc. Enforcers know this, and I suspect they basically wouldn't even try it.

ii. They can enforce as against individual gamblers (like each of us). This would be almost as bad. Enforcers would have to issue subpoenas to major ISPs like AOL and Earthlink and Verizon and Comcast to determine who is gambling. These companies have basically fought to the death to avoid complying with these subpoenas. Why? Because they know damn well that if they pass off information on you, they will be knee deep in litigation (right or wrong) for passing customer information to the feds. Furthermore, enforcing as against individuals is extremely inefficient. It would take tons of time, tons or money, and tons of effort to get (possibly) one or two convictions.

iii. They can enforce as against ISPs, by instructing them to block IP Addresses from the major gambling websites. This, frankly, is the biggest concern. The ISPs may not want to fight this fight. On the other hand, they probably will. Why? They don't want to lose customers, which they would if they blocked gambling sites. They know the score. Second, they don't want government telling them what to do. There would be a bunch of free speech and commerce clause stuff to work through via lawsuit, and no one wants to deal, certainly not the ISPs. Again, ISPs have tended to really fight the good fight when it comes to helping government enforce their laws.

This also applies to the major telecommunications networks across the country. Similar problems, just more widespread.

WORST CASE, LAW PASSES AND AGENCIES SUCCESSFULLY ENFORCE:

Ok, let's say everything goes horribly to this point. Problem? Slightly, but not seriously. It's the Internet folks. Though it may take awhile, sites would adapt by arranging more complex network paths, (i.e. you would connect to wholesomefamilyfun.com, which would route you to Pokerstars, or wherever). Basically, there would be a lot of tips and tricks, but it would be arranged. I assure you of that.

Basically, I'm not trying to write a book here. I just want to make it clear that the chances of this (a) passing, (b) being enforced, (c) seriously mattering, even if passed and enforced are very slim. The chances that this bill will have any serious industry-shattering effect on online gaming is, in one word: "zero."

It's not to say that you should not go through the proper channels, and write your congress people, etc. You should. We just need to recognize that the sky is not falling, no matter what happens on this.

[Vern]

I think the biggest threat of the bill is on background checks for young students trying to get jobs. Right now, in its quasi state, a company may see online gambling as a small risk. If this legislation passes, anyone that continues to play could ruin their chances for employment that requires a background check.

[StarlightCoast]

Basically the problem as I see it is this. I am not concerned about blocking access because we can get around it. Nor am I concerned they are going to bust down my door and arrest me. The main problem is money. How will I get the money I win from a poker site if the new law, if it passes will make it illegal for my bank to accept a wire transfer, EFT, or cash a check from the poker site. Perhaps a check cashing place, but I don't know if they will not be allowed to cash it if the law goes through.

[Wynton]

I respectfully disagree.

Although my prediction has always been that a watered-down version of the legislation is what will likely pass (making virtually no difference), I cannot accept your argument that because "nothing has changed" this bill will have the same fate as prior attempts. For one thing, I think things actually have changed, because poker and internet gambling is more high-profile than ever.

Setting the unpredictable issue of politics aside, I also think you may overestimate the willingness of ISPs to fight this battle. For them, the gambling sites probably represent a miniscule percentage of their profits. And though it may be wise for them to take a stand here against government intervention, they could just as easily decide to take the path of least resistance.

Moreover, you are dismissing the chilling effect the legislation could have on financial institutions (including neteller), web sites and poker players. Whether the enforcement mechanisms are airtight or not may not be the critical issue; for many institutions and individuals will likely be dissuaded from having any association with gambling sites.

Now I agree that the legislation would not eliminate internet gambling. But that hardly means that these various bills should not be taken seriously.

[jt1]

I agree that the problem is with ISP's and banks. This bill makes no mention of ISP's, so as of today we're off the hook there. But how will the casual player get his money if banks refuse to process the transaction? They will have to accept checks which would discourage the casual player, imo. Or they'd have to get a Neteller debit card.

On the other hand, as I look at all the cash out options Party Poker has, I can easily see the sites making new arrangements to ensure their customers can continue to cash out quickly and easily. One example would be a business arrangement with Neteller that would have Neteller automatically send every customer who does business with PP, a debit card.

FWIW, I'm a little dissapointed that poker wasn't given an exemption. We all know why horseracing was given an exemption and if PPA had just contacted Leach earlier, this bill would just be the "same ol', same ol'". As it is, however, it's a potential threat to our livlihoods.

BTW, do you think Leach proposes these bills just to extort campaign donations from the horseracing lobby and the Christian coalition?

[Uglyowl]

I have nothing further to add, but thanks for the great information/debate!

[coachkf]

"It's the Internet folks. Though it may take awhile, sites would adapt by arranging more complex network paths..."

While I agree that this junk probably won't be signed into law, I've gotta say that if it did, God forbid, things would be alot worse than you'd imagine.

While your hardcore folks would continue to play, most of your recreational/entertainment players would not do something that they #1 know is illegal and #2 have to go through complex channels and redirects to get to. It would be like Empire after the Party split. Alot of "working" players and no fishies.

Even if this thing did pass, I don't see online poker dying of course. More and more growth in online gambling is coming from Europe, as the online poker craze is just really getting going over there. True, you'd see a lot of small sites either go under or merge with bigger sites, but the big online poker sites would still be making major hay from their European bases alone. For that matter, there are already some "non-USA" poker sites that are doing quite well.

Meanwhile, here in the States, I think millions of pissed off online gamblers and poker players would finally go to the polls, help throw some of these bums out and get any jacka$$ laws repealed.

Some political numbers: Bush beat Kerry in 2004, 62 million votes to 59 million votes. Meanwhile, most estimates note that between 7.5 and 8 million Americans logged into online gambling sites in 2005. With the people and money in this industry, there's no reason at all we shouldn't be having an effect on our political landscape.

[mmcd]

[ QUOTE ]
While your hardcore folks would continue to play, most of your recreational/entertainment players would not do something that they #1 know is illegal and #2 have to go through complex channels and redirects to get to. It would be like Empire after the Party split. Alot of "working" players and no fishies.


[/ QUOTE ]

Most people wouldn't even know it's illegal. If the sites did all redirections on their end and made it at least somewhat seamless, I seriously doubt your average recreational would even know the difference.

All of my friends that I've talked to about this bill who aren't serious poker players have never even heard of it, and if it somehow passes, they're not going to know unless I tell them.

It's not like there's wide press coverage every time Congress passes a new law.

[dustyn]

I don't disagree with what you're saying, but the problem with the bill is it will scare the fish away, not scare us away. Obviously, we know where our profits come from.

[mmcd]

[ QUOTE ]
I don't disagree with what you're saying, but the problem with the bill is it will scare the fish away, not scare us away. Obviously, we know where our profits come from.

[/ QUOTE ]

My point is if the sites respond to it right, this bill could become law without your average fish ever having even heard of it.

This is the type of law that'll get coverage CSPAN, not CNN.

Maybe a few blurbs on page 4 of the paper for a few days, then that's it.