The silly war on Internet gambling
A bill before Congress, sponsored by Rep. Jim Leach, R-Iowa, (which has over a dozen casinos, a gambling cruise ship, two dog tracks, a horse track, and a lottery), would attempt to curtail Internet gambling by creating criminal penalties for credit card and other companies that process Internet gambling transactions.
What’s the difference between the legal forms of gambling and the illegal forms? Some of the legal varieties are less appealing, in part because the “vig” tends to be higher (lotteries return less than 60 percent of their take in prizes). Certain kinds of authorized gambling convey the special grimness of state-sponsored vice, which will be familiar to those who have visited riverboat casinos in desperate Mississippi and Indiana towns. But morally and in terms of their social consequence, it’s hard to draw any distinction at all. […]
Various pressures ensure that the American hypocrisy about gambling will only get worse in the near future. The hunger of cash-starved state governments for new revenue streams combined with the miraculous renaissance of hundreds of Indian tribes previously unknown or assumed to be extinct means that the trend toward legalized gambling in more places is likely to continue apace. On the other hand, the vested power of established interests means that every new “gaming” venture faces resistance.
Hasn’t this already been covered? Yes, yes, yes, the government’s bad, the administration is evil, and the GOP is running everything to the ground. Ok, we get it.
Two strikes against Internet gaming:
1. Personal: No guarantee you’ll get your winnings returned from the “casino.”
2. Political: No way for the Internet casinos to be able to contribute to Congressional campaigns. They’re all foreign entities that aren’t allowed to contribute, so they’ll never be legalized.
#1, I think you commented on the wrong story, or you haven’t taken your medication yet. Whichever.
#1: So, I guess that means you’re going to vote Democratic since you agree the Republicans are bad for the country?
We hear that if you take advertising money from an Internet Gaming company you could be in trouble as well.
There is nothing wrong with internet gambling, at least from Pokerstars and Full Tilt. Both do pay you back
One of my biggest criticisms of internet gaming also applies to any form of electronic gaming, including “legitimate” casinos. There is no verifiable guarantee that the odds you get as a player are the same as what you’d get with physical playing pieces.
For example, if you have a physical deck of 52 cards, you know that after a proper shuffle, your chances are 1 in 52 of being dealt a King of Hearts as the first card. When an electronic machine deals, the odds of getting that card are whatever the programmer designed the odds to be, maybe 1 in 20, or maybe 1 in 200. There is no guarantee by the casino that the odds of virtual game play reflect “true” game odds, and no way for the player to discover or verify what the actual odds are. I think most players just assume that electronic odds are identical to the odds of the physical games these computers emulate, but that’s an assumption with no basis.
There’s only one absolute guarantee a player has in electronic gaming: the computer programs were written by people well educated in probability theory, who have a primary motive of separating you from your money. And if you think they’re cheating you, you have very little recourse except to gamble elsewhere (or not at all). In the case of internet gaming, about the worst you can do is send them a harshly-worded email.
Having gone through the slot tech school, Gary, that’s not right. When you press the Deal button on a poker machines, ten cards out of the 52 are randomly pulled. What gets pulled is 100% random. 5 are displayed at first. When you select what to keep, the cards to replace them are pulled from the other 5 that were initially dealt, in the order they were dealt. What gets paid is completely a function of the pay table.
For a business that makes Billions of dollars per year, they dont pay the taxes.
Other groups, I cant say countries or corps, are making this money and paying NO tax, as they are OFFSHORE, and no country has rights to it.
Utah has had laws against all forms of gambling since statehood. However, some country in the Caribbean(?) brought charges against the US for violating some international trade treaty because Utah would not allow internet gambling. The WTO ruled against the United States. My interpretation of the ruling is suspect, but I believe they ruled that as long as some form of gambling is permitted in the US, then off-shore casinos must be allowed to compete everywhere in the US.
If a hundred year-old state law can be so easily trumped by a recent trate agreement, then I seriously doubt that Rep. Leach’s bill would survive scrutiny by the courts.
Uncle Dave, when the Nevada Gaming Commission approves an electronic gaming device for use in Nevada, do they have access to examine the programming that drives it, or do they simply have it tested and certified for a specific player return percentage, comparing it to the manufacturer’s claims? How does that machine certification process work? My impression is that most of the regulations are simply designed to make the computerized components as tamper-free as possible by anyone other than authorized gaming employees making approved changes or repairs. I’m always suspicious of “black box” electronics unless an objective third party has examined the program code.
Of course, any offshore internet gaming operations are without Nevada’s, and possibly any other, gaming protections. Enter at your own risk.
Did everyone sleep through the Jack Abramoff lecture???? The question is… Did everyone sleep through math class?
The odds are against you. Gambling online is even stupider than gambling in an actual casino.
Oh yes… I agree… Online gambling should be legal, people should be able to make decisions themselves, get big government off our back, bla bla bla…. But really, giving money to any casino, online or off, is just dumb.
The approach congress is taking of attacking the credit card companies will create a nuisance at best, at worst it could help things like pirate warez sites flourish.
How?
The internet gambling sites won’t go out of business. Instead they may decide on using a third party Internet Cash type company like XRost. You don’t use your credit card with the gambling company, instead you buy credits with them, which may have some legitimate uses, and thus be acceptable to credit cards.
These services would be completely out of the control of the U.S. and thus the money could be used fairly anonymously by U.S. users to pay for warez sites, or even child porn.
Don’t believe me? That’s how services like Allofmp3 get around restrictions.
I remember reading about how during the early 1800s the states were busy passing laws to restrict the growth of the early railroad lines being built because of the threat they posed to the canal systems widely in use at the time. Things never change.
That Utah ruling, as Smith has described it, seems completely absurd. How can a treaty (which only has the same force as statutory law) supercede the US Constitution and make a state to do something that even our federal government couldn’t (force it to allow gambling)?
Gary, I don’t know much about the entire process, but they do test the random number generators, the par (percentage of payback) and yes, check the code. A company called GLI actually does the testing.
Good answer, Uncle Dave — you single-handedly help save the reputation of Nevada gambling from my vicious, but somewhat uninformed attack 😉 I always have the security of a solid fallback position, though, based on the disadvantageous probabilities inherent to the games themselves.
Now, if we only had a GLI-type certification process to test the unseen inner workings of government…
#14 – Me
Just so I am clear… You are not saying that offshore I-gambling sites are a front for piracy and child porn. Rather, you are saying the offshore based pay-pal clone could ALSO be used to buy warez and kiddyporn. Right?
Well… So what?
I mean child porn, the most amazing boogie-man issue of our time, is illegal no matter how you buy it, and a person who is in possesion of child porn is in violation of the law whether it was paid for with cash, credit, beaver pelts, or stolen.
You are right that trying to cutail the issue with legislation aimed at credit cards is ultimately ineffectual. That simply illustrates that our lawmakers aren’t that much more savvy about technology than my grandmother. (it’s a series of tubes 🙂 )
But even though I have no sympathy for the issue, it remains that the state has no legitimate interest in telling people they can’t gamble. A fool and their money, ya know…
the first paragraph of the articles says it all….Iowa has millions invested in gambling…live gambling…..so it’s natural(for politicians) to sponser a bill like this one by Leach. It’s actually not a party thing, but an old fashioned *save the local industry* thing.
15. Mike: Here is an article on the WTO ruling. Odd how no one seemed to care.
http://tinyurl.com/ovl6r
20. 15. Under the US Constitution, Treaties are the Supreme Law of the Land:
Article VI:
This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.
This is nothing new whatsoever.
And the movement against internet gambling is, as everyone has said, just market protection for the legalized vice that State governments and Indian tribes license and tax. That’s all.
Uncle Dave,
While I am uneasy about something that is very difficult for a layperson to verify, I accept your explanation. I would also accept that all physical casinos in America use legit games and are audited. Unfortunately I have no assurance that any on-line casino is also following any government or other neutral audit. Yes, there may be some payouts, but then the ole Three Card Monte routine starts with some payouts too. I heard about a couple nearby that went bankrupt because the wife lost so much gambling on-line (just stories, no verification).
As far as lotteries go, for everyone who wins a million bucks, a million people had to lose a buck. But if I spend $5 on some lottery tickets and get to fantasize for a couple of days how I would spend my winnings, it could be far cheaper and more entertaining then a movie.
Call me old fashioned but I still believe in the concept of vice. Behavior that is bad enough for society that it should be legally discouraged.
Gambling used to be a vice until state governments wanted to get a cut of it. Now they gleefully encourage gambling and it seems obvious that society is the worse for it.
Not me, personally. And probably not you. But the millions of marginally poor who gamble away the money they could be using on insurance or a rainy day fund.
On principle, I would tend to oppose government interference in a consensual activity, on the other hand, the fact that online gambling sites are the number one source of blog-comment spam makes me much less sympathetic to their cause.
Ok, doug, I do believe that I said treaties have the same force as statutory law (i.e. laws that are passed by Congress and signed by the President), but neither of them trump the Constitution. A treaty with unconstitutional provisions would be just as invalid as an unconstitutional statute would be.
25. I would agree that an unconstitutional treaty would be uninforceable. However, Congress can use the treaty power in the same way it can use the commerce clause to override state laws. there is an old line of cases that talks about the conflict of state laws with treaties (one of them is about migratory birds, I believe), and the treaties have been consistently upheld.
But we are talking about gambling here. There are intrastate lotteries and there are interstate lotteries, but Congress couldn’t just pass a law requiring that states allow their citizens to buy PowerBall tickets while physically inside the borders of that state. I don’t see how this is any different from requiring a state to allow its citizens to gamble online from within its borders. And it even more troubling that an organization outside of the US would be able to make such a ruling (I can’t get the posted link to work, so I’m basing my comments soley on what Smith has said here).