Big Casinos May Now Regret That They Had Congress Ban Internet Gambling

from the oh,-whoops... dept

While there was all sorts of sanctimonious language about protecting children and the “sins” of gambling when Congress put a bill that effectively banned online gambling into a law about protecting our ports (don’t ask), everyone knew the real reason why Congress banned online gambling: the big casinos were afraid of the competition. They even claimed that people wouldn’t want to come to real casinos any more if they could just gamble online. It’s like the claims of musicians when records first came out, that no one would ever want to see live music again. Or the idea that with a VCR, no one would want to go to the movies again. Of course, as with those situations, it turns out that the casinos are finally realizing that (1) they can actually profit directly from online gambling and (2) it probably drives more people to real casinos, rather than fewer. So, suddenly they’re trying to convince Congress that it’s okay to legalize at least online poker, completely at odds with what they’ve claimed in the past. Of course, you’ll never see any of them admit that perhaps they made a mistake in getting such legislation passed in the first place…

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Comments on “Big Casinos May Now Regret That They Had Congress Ban Internet Gambling”

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ChrisB (profile) says:

Re: Ha

> Sounds like a good plan (for them) to me.

I’m not sure if you’re joking. It was a ridiculous plan, if they were eventually going to get into online gaming. When the US outlawed online gaming, it did hurt Pokerstars and FullTilt, but what they did was aggressively focus on Europe. Now they don’t need Americans (even though many still play online). When HarrahsOnline, or whatever, tries to come in, they won’t have a chance. For online poker, at least, you need to have enough people playing so there is always a game going. At 3am, I can register for a 90 person sit-and-go, and it will be full in a few minutes. There is no way any Vegas online casino could even hope to get those kind of numbers.

Jim says:

I call bullshit.

Not at the article, not at the post however; its a spot on assessment. But if I was one of the big established online gambling sites, and all of a sudden it becomes “ok” to permit online gambling in the U.S.; I would either sue or get my government to sue (via the WTO) for protectionist practices.

Using the excuse its “for the children” is bullshit, adults (most of them anyway) are perfectly capable of gambling reasonably without going into bankruptcy ***cough – Stock Market***.

Anonymous Coward says:

You mean the Indians don’t you? Big casinos are tribes and they are sovereign nations. What the hell has congress got to do with that? As far as I know they are their own nation now. No more reservations on government land, they claim to be sovereign nations and the reservations / land they are on is their nation now. Has nothing to do with congress anymore or is that bullshit from the tribes to get out of paying their bills.

nasch (profile) says:

Re: Re:

1. There are plenty of big casinos in places other than Indian reservations. 2. Congress also outlawed payments from the US to gambling operations in other countries, so that even if the gambling site is not regulated by the US, the gambler and, more importantly, the credit card processor, would be guilty of a crime. 3. They’re not just sovereign nations “now”, that has been the case forever (claim to be?). They were sovereign nations when the whites got here, and we continue to recognize that status.

out_of_the_blue says:

Casinos sum up the failure of capitalism.

Suckers risking what they have hoping to get rich quick by luck so that they can live in idle luxury, while in fact the house *always* wins.

Would I forbid it? No, but I’d forbid large winnings, either to players OR the immensely larger to those who own the house. Again, a steeply progressive income tax would mechanically diminish nearly all forms of social evils.

bdhoro says:

Don't hate - they'll just need to catch up.

Well the law has effectively done nothing to stop online gambling…. why do we have laws again?

Anyway @out of the blue – “the house always wins” doesn’t really apply to online gambling where most everybody is playing poker. The winnings go to the players, the house takes a small percentage of all pots over a certain amount.

The law should be repealed for many reasons, most important of which is that we shouldn’t allow laws to be on the books that are so utterly ineffective. But also its making illegal the better form of gambling, the type where the players play against each other not the house, and use skill to win.

The things that we make illegal in this country even though we know how much people still use and pay well for them. Our government wants to raise taxes but instead they ship millions overseas to the companies that circumvent US law. Or send all the money to the black market, thats better than legalization and taxation.

Michael (profile) says:

Re: Don't hate - they'll just need to catch up.

“”the house always wins” doesn’t really apply to online gambling where most everybody is playing poker. The winnings go to the players, the house takes a small percentage of all pots over a certain amount”

Umm…that is the very definition of the house always winning. If I lose, they get paid, if you lose, they get paid, if everyone comes out even, they get paid (and we all lost a little).

Ryan Diederich says:

The ban was such a farce...

I can go online right now and gamble, the ban was a stupid idea. All it did was drive the american internet gambling companies out of the country, and the sales tax, income tax, business tax, what have you to another country.

Me and my father kept right on playing, the websites went down for 2 or 3 days.

MelB says:

I work in the industry....

Technically, the unlawful gambling act (UIGEA, the law that prohibited deposits on a federal level) was not a ban. It was a law that pushed the decision down to the states where it should be. Only the states have a right to regulate this as it is not explicitly stated in the constitution, thus falling under the 10th Amendment.

It’s true that the land based casinos forced the issue which ultimately lead to the passing of UIGEA. But what many don’t realize is that until UIGEA, the activity of online gambling was ‘grey’ (and to some extent with UIGEA being so poorly worded it still is). Before UIGEA, many land based casinos tried to complete in the space by launching sites that were legal (not targeting US players). Sadly, by operating in a completely legal environment, they lost money while off shore companies more effectively competed targeting US players and operating in the grey market. It was an unfair playing field against the land based casinos…. they had to force the issue.

I am a huge supporter of the online gambling industry and been working in it for 7 years. The land based casinos in the US at the time had no choice. With no law explicitly stating what was legal or illegal, they couldn’t fairly compete. Land based casinos did what they had to do. Operating in an unfair playing field where a confusing law has been insufficiently enforced is not sustainable.

The situation is now changing. The shame of the matter right now is the confusion over state wide initiatives vis-a-vis a federal solution. For the reason stated above (10th Amendment) a federal solution is not viable for a number of reasons despite a vast amount of lobbying dollars supporting the issue. Forty eight attorney generals have written to the federal legislature voicing their concern over a federal solution.

On a state level, there are a number of state initiatives in development at varying stages. I believe New Jersey will be first state to regulate for a number of reasons. California and Florida also could prove interesting. While the next year will prove interesting for the industry, what would be really helpful is more accurate reporting on the subject.

I used to work in the new media (music/movies) industry, and I used the same comparatives as the author of this article. It is not the same. Comparing the online gambling to paradigm shift to movie/music industries is not accurate. The gambling industry is highly regulated, and as such, there are numerous non-commercial constraints put upon operators. Sometimes this can work out in their favour. But many times not. They need to be protective. Do not underestimate how much they ‘get it’.

Poker Directory (user link) says:

Who controls this country??

I like the candor because yes we do all know why online gaming is on the chopping block at all times. It has nothing to do with protecting the citizenship or the youngsters. Just like everything else in this country things are controlled by money and power and those that have it and those that don’t just don’t get their say. Worse yet is that in many cases things are controlled by some skewed perception. In this case looks like it backfired.


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