Tuesday, September 26, 2006

Stop The Insanity! Save Online Poker!

I thought I had given up political ranting long ago, when age and cynicism had settled in, but I find that the machinations of the US House of Representatives has rekindled my activist spirit. Nothing like a threat to my central avocation to awaken the ranter in me.

There are now two threats to online poker in the US: HR 4411, which has already passed the House, and HR 4777, which has just been sent up from committee to the full House for consideration. We dodged a bullet when the last Senate session closed without considering the Senate equivalent of 4411. That means that 4411 is hanging fire and can be voted on in the Senate at any time. Meanwhile 4777 has popped out of committee limbo-land and has been put on the congressional calendar for debate.

So what are these bills all about? You can find the full text of each by following the links above. A plain English analysis HR 4411 is available at the PPA. I won't get into the details here, but I will highlight what I think is so wrong about both of these bills.

HR 4411, the Unlawful Internet Gambling Enforcement Act of 2006, proposes to update the Wire Act so that transfer of electronic funds is prohibited if the funds are to be used for gambling.

The first problem is that the definition of "gambling" is both too vague and too specific. The vague part has to do with games of chance. Is poker included? The text of the bill says: "...staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game predominantly subject to chance, upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome ..." There is chance involved in poker, but is it predominantly chance? I don't think so. The too specific part has to do with exceptions for online lotteries, horse races, and fantasy sports. Huh?!? Why do those specific items get loopholes? Can you say lobbying?

The second problem is Constitutional. HR 4411 prohibits web sites from linking to gambling sites. This prohibition probably oversteps First Amendment rights. It can at least be argued as unconstitutional on that basis.

The third and to me most important problem with HR 4411 is that the bill will not only fail to achieve its purported goal, it will actually make things worse. The purported goal is to protect people from losing money to shifty offshore crooks. These crooks are unregulated by the US government and by definition must be evil. The government contends that unregulated sites will take deposits from US citizens and then disappear, making off with all the funds. Also, the government contends that innocent children and babies are enticed by shifty operators to use Dad's credit card to play roulette, possibly bankrupting little Johnny's family.

I'll take on the protection against crooks argument first. While there is no denying that theft, fraud and embezzlement happens in online poker, the proposed cure is worse than the disease. Making electronic funds transfer illegal simply sends the industry underground. Instead of relying on legitimate and regulated financial institutions to handle funds transfer, gamblers will be forced to use unregulated, offshore entities. Shady characters will be attracted to all this money looking for a way to get to SlotsOnline.com and other sites. Theft and fraud will mushroom. Innocent victims will have no protection and no recourse, since no one will take complaints to a US authority if it means admitting to a crime. If this bill is enacted, the net result will be that more innocent people will lose their money to criminals than if the law had never been past.

The other argument, protecting kids, is out of proportion to reality. Like kids aren't already using their parents credit cards to get online porn, or buy bootleg software and music? Johnny's family is more likely to go broke from Johnny paying off get-rich-quick schemers and pay-to-play video game sites than from online gambling. This law won't stop kids from breaking the law, it will just give them more to break.

HR 4477 is similar to HR 4411 (some of the language of 4777 was incorporated into 4411). 4777 targets any information that enables gambling, not just electronic funds. 4777 has even more Constitutional problems and runs afoul of the First Amendment to an even greater extent.

So that's my rant. Things look pretty grim. Online poker in the US is hanging by a thread and Congress has a big pair of scissors. I've never been politically active in any cause before this, but I'm going to dive into this one. I plan on joining the Poker Player's Alliance and participating in all of their letter and phone campaigns. I urge you to do the same.

Learn more about the PPA at http://www.pokerplayersalliance.org/

Some of you might be ticked off that far more important issues like the war in Iraq, global warming, gay marriage, and other far reaching and much more serious attacks on life and liberty did not move me, but threats to online poker have. I realize that in the grand scheme of things, the future of online poker is a small issue. So, sue me. Maybe you think my priorities are screwed up; whatever, dude.

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