Keep Internet Gambling Legal
by Fred E. Foldvary, Senior Editor
The gambling industry, or "gaming" as they like to call it, has become a major player in the Internet. While real-estate-based casinos offer a lot of hardware such as slot machines, roulette wheels, and card tables, gambling is essentially a mental construct. The money that is exchanged is basically numbers, the vehicles such as cards and wheels are images that can be electronic, and the communication can now be digital. So gambling, like music and text, is well suited to doing business on the Internet.
Whereas many U.S. State governments ban gambling, other than their own lottery monopolies, the Internet has no real location, so online gambling slips by orthogonal to State and federal laws. Now some State legislators and Representatives in Congress are seeking to prohibit Internet gaming. Congressman James Leach of Iowa has been trying to enact his Unlawful Internet Gambling Funding Prohibition Act. The bill would make it illegal to send funds electronically for illegal online gambling.
The September 11 terrorist attacks have become for some an excuse to increase government power. Leach slipped his bill into an anti-terrorist bill. The excuse is that illegal Internet gambling web sites may have been used for money laundering by organized crime, and also, "Islamic" extremists have used money laundering in connection with their attacks. Leach combined these activities to allege that terrorists use Internet gambling to launder money.
But the FBI as well as the CIA have stated that there is no evidence that Islamic terrorists have had any connection with Internet gaming. The Senate voted for an anti-terrorist bill that did not include any prohibition of online gambling or its use of funds. The inclusion of the anti-gambling provisions would have complicated the bill unnecessarily at a time of crisis.
Representative Frank Wolf of Virginia has also called for bans on Internet gaming. According to I. Nelson Rose's article "Politics and the Law of Gambling" in the Spring 2002 Gambling Times, Wolf stated, "Gambling is beginning to destroy and fundamentally corrupt this country." Is he crying wolf?
At the State level, in California, Assemblyman Dario Frommer is pushing AB1229, a bill to ban Internet gambling in the State. If it becomes illegal for any resident in the State to gamble on the Internet, how is this supposed to be enforced? Is the State government to spy and monitor all Internet messages coming into and out of the State? The bill passed the State Assembly 61-2 but has so far not been passed by the California Senate. Gambling Times reports that their telephone calls to him have been ignored.
One wonders what great problem these bills are trying to solve. Gambling does have its problems, including fraud and addiction, but the wide popularity of gambling indicates that most folks do not abhor it as some horrible sin or a great threat to national security.
A ban on Internet gambling violates our natural and Constitutional rights. If you are not allowed to indulge in gambling even inside your own home, then the government voids your property rights to your home as well as your right to spend your money as you wish. To enforce the law, the State would have to be given the power to intrude into your private conversations and financial dealings. Our rights have already been severely eroded as it is.
If there is a problem with fraud or other consumer protection, that can well be handled without a complete prohibition. And to the extent that online gambling takes away business from landed gaming places, the answer is that competition is not and should not be a tort or crime.
This is not to say that gambling is any wonderful thing. I personally think folks should have more productive and more wholesome ways of spending their time and money. But that's my personal taste. As a libertarian, I don't favor forcing anyone's personal preferences on others.
Life has enough risks and gambles without adding to them. But if folks like the thrill of taking chances with their money, to forcibly prevent them from doing so is an assault on their dignity as adult human beings with minds and values of their own. Whatever troubles exist with gaming, the best policy is to focus directly on the problem and not the medium or an activity that many indulge in without problems.
A ban on Internet gambling is not just a big-government nanny-state meddling with a recreational preference, but also a trade barrier, an intervention on enterprise, an assault on an industry. Shame on those legislatures who ignorantly wield their power against individual choice. They are the problem, not the gamblers.
-- Fred Foldvary
Copyright 2002 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.
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