Anti Online Gambling Bill Passes
First it was Washington State, now it's Washington D.C. The House passed the anti-online gambling bill today which means should this bill pass the Senate it is just one short signature away from being law, and I think we all know George W Bush will sign the bill into law given the choice. Read the CNN article here
The vote on the bill wasn't even close, 317 to 93, what a colossal mess this is, what a great chance to regulate an industry, keep money in country, make some tax money and not force an industry to lose clientele.
The same arguments are being used that have always been used. Online gambling is not regulated, kids can gamble, people are racking up huge debt.
Rep Leech has been quoted as saying "Never before has it been so easy to lose so much money so quickly at such a young age." Do these arguments speak the truth. Sure I know the industry isn't regulated. Can kids gamble? certainly, they smoke and drink too. Are people racking up huge debt? Of course they are, it's happens in Vegas, and in Atlantic city and yes, even next door with people that don't know their limits. Should this industry be punished? No, they should be encouraged to limit these things from happening.
We can learn a lot from history, and if our Representatives would listen, history would tell us that banning something doesn't work. Banning alcohol didn't stop people from drinking, and banning gambling didn't stop people from gambling. History is full of bans that didn't work. Those involved always found a way around the law so that they could continue to do what they want.
Alcohol is legal now, and there are rules in place to limit underage drinking, the game goes for gambling, but for some reason those men and women in Washington feel that a ban is the only way to solve this "online gambling problem."
I gamble, and if you don't that great, I respect you for you decision. This bill has repercussions that go beyond online gambling. Now I think we can all agree that this bill isn't going to stop most people from gambling online. If we accept this statement as being true then what will this bill really do? As I see it there
will be 4 factors that this bill if passed into law will affect.
Please bare with me as it's been a while since I took Economics in school.
The first thing I would like to cover is the economy. The economy is based on a person spending a dollar on a good or service and then the vender providing the good or service spending that same dollar on another good or service. That dollar is worth more than the single item it buys. That one dollar has real power in the economy. Now of course that statement is grossly simplified but it explains the basis of the economy. The economy relies on that dollar to move from hand to hand in exchange for goods or services. When foreign dollars enter the country it strengthens the economy because here is a dollar that did not exist before. Conversely when a dollar leaves the country it weakens the economy because that dollar can no longer buy a good or service in American. Now you might be wondering how this fits in to my argument against online casinos since they are already offshore? Well it's simple, if online gambling was legalized they wouldn't be offshore, they could be based in the United States. They could become a contributing industry to the US economy worth an estimated 12 Billion dollars a year. Read the
LA Times article.
Now that I have explained the economy I would like to cover taxes. In the US when you win money you pay taxes on the winnings, when you take money in or spend money on goods or services you pay taxes, basically if you are involved in the economy you pay takes. With the possibility of online gambling being illegal do you think winners will pay taxes? Not likely, it would tip their hand that they gambled online, the online casinos would be sending tax checks to Washington for all the money that American's spend in their casino. The US government is missing out on a huge source of tax revenue. Even though I hate paying taxes, since I pay taxes on my Vegas winnings, I'd pay my taxes on online winnings and so would pretty much every one else.
Now that the economy has been weakened and a source of potential tax revenue isn't being tapped lets see how the economy can be weakened more. There is a provision in the bill that will all authorities to force an ISP to shut down links to online gambling sites. How is this going to affect the economy? Well as a person who runs a website that links to online casino's and pays an American hosting company to host my website I will be moving my site offshore just like the casino's did. Why would I do this? Well I do get paid for the ads I run on my site and I want to keep that ad money coming in. It isn't a lot but it is still nice to have, it helps pay for my kids braces. I won't be the only one leaving, it might be slow but as soon as the first link is taken down you can be sure there will be an exodus from American hosting companies. The kicker is that the end user will never know the site is now hosted outside the US. How many people will lose their jobs? I have no way of knowing but I am sure it will be greater than zero.
I think that is enough of a lesson or lecture on the economic impact that this bill could have. The social impacts could be just as devastating.
If the industry was regulated a system could have been setup that could have identified problem gamblers and underage gamblers and limit their gambling activities
and offered them help with their problems. Now there is noting to promote that idea.
Online casinos have an advantage of land based casinos. Joe could walk into the Venetian and drop $30 000 on the craps table and be seriously in debt, the casino
could cut him off and likely would because they really don't want to destroy a person life, but nothing stops Joe from walking down the strip to another casino and dropping another $30 000. That second casino would not know about the losses at the first casino. Now in the online world with some cooperation between online casino's or a database of problem gamblers could be setup. They could be identified by their screen name, real name, even the IP address of their computer. The player could be offered a cooling off period, help lines for a problem or even an outright ban. Of course all of these can be circumvented by a serious gambler it is a major advantage that online casino's could have had with a little encouragement from the US government. The same methods could be used to try and control underage gambling.
With a US based, regulated online gaming industry the tax revenues could have been spent on education for young people and for setting up programs for problem gamblers.
Now the nation will have to pay for these programs out of the existing tax revenues. We know that education is the only real way to limit something from happening and programs are the only way to help those that have been affected by an addiction. It is too bad that the government refuses to see that.
I am sure that this bill will be passed, a new law will be made and in the end nothing will be very different from today. But when the government realizes that
the ban didn't work what's next? Do we take a page from the Chinese government handbook and create the great firewall of America? Read the Wiki article on the Great Firewall of China.
I truly hope that smarter heads prevail and this bill is defeated in the Senate. This isn't just a simple internet issue that effects a small portion of the population. This is a socio-economic issue with a great impact than what is being reported.
That's all, I fold.