OP-EDS

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October 17, 2006

Upping the ante

Online gambling has been banished. Well, it has always been illegal, but lately the federal government has gone into overdrive trying to put an end to it. The final nail in the coffin might have been hammered in on September 30, when Congress passed a bill that forces credit card companies and banks to stop processing payments to online gambling sites, turning millions of American poker enthusiasts into potential crooks. This law effectively bans online gambling for American users.

This hits particularly close to home given the popularity of online gambling—particularly Texas Hold ’Em—with college students. While some students, not to mention other gamblers from every walk of life, have been sucked into a spiral of addiction while using these easily accessible online gambling sites, many use the sites responsibly as diversions or showcases of skill. For these responsible users, the ban must seem baffling—why is a low-stakes game of late-night poker a crime?

The answer is a troubling example of the role of lobbyists and special interest groups in shaping legislation. State lottery commissions, Vegas honchos, and local casinos have formed one of the most unsavory and potent lobbies, able to exercise the vast power of the federal government against their most promising competitor.

Even worse, the gambling lobby and the politicians doing its bidding have argued against online gambling by attacking the legality and morality of their rivals, all while hiding behind government protection. Hypocritical? Yes, but it gets worse. The federal government has no problem with states preying on poor minorities with their state lotteries, but when it comes to affluent (you have to have a computer and a high-speed connection) poker enthusiasts, a whole set of different rules apply.

Yet the gambling interests are merely playing the game. And in this case, it’s Congress that’s cheating Americans. Banning online gambling is likely to be just as effective as Prohibition. That is not to say gambling can lead to excesses, but that those excesses will only be exacerbated by pushing it underground. Relative to its alternatives, the Internet is a particularly good venue for gambling, because it has been effective at checking cheating and it ensures that people don’t overspend by monitoring every play.

It’s time to put our chips on the table, get serious about the logic behind laws, and not let Congress do the bidding of disgustingly self-interested parties.