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The federal government is wrong about online gambling
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Photo Erik Araujo
The federal government doesn’t approve of online gambling. And to stop you from playing a few hands of internet poker, they will confiscate money related to “illegal gambling offenses” right out of your bank account.
This is the unfortunate story of one player named David. According to ABC news, David won a $10,000 jackpot which qualified him for the World Series of Poker. His plan was to use the winnings to enter the tournament, which is held in Las Vegas annually. When David went to cash his check issued by the online casino pokerstars.net, it bounced. What he “initially thought was a glitch turned out to be part of an unprecedented government crackdown on online poker that affected some 27,000 people,” ABC news said.
While the Justice Department has maintained for years that online gambling is illegal, they don’t directly prosecute online gamblers because they don’t have the legal authority to do so. As Competitive Enterprise Institute research analyst Michelle Minton points out, “[g]ambling online for money is legal in the United States [...] [t]hree federal laws regulate Internet gambling […] [and] [n]one of these laws—and no state laws outside of Washington—bar individuals from placing non-sports bets online.”
But legal barriers have never stopped overzealous government officials from pursuing their agendas. Since they have no authority to directly prosecute online gamblers, Justice Department attorneys are using a 2006 law called the Unlawful Internet Gambling Enforcement Act (UIGEA) to require banks, credit unions, and credit card companies to prohibit “illegal online gaming transactions.”
What exactly constitutes “illegal online gaming transactions”? Nobody really knows since the (UIGEA) doesn’t actually provide a clear definition. And that’s precisely the point. Financial institutions can’t possibly know what their legal obligations are when handling these transactions. So instead of running the risk of coming into the government’s crosshairs, most banks and credit card companies often choose not to handle funds associated with online gambling. This is why thousands of online players’ funds were frozen.
So why is the federal government so aggressively intervening in the lives and activities of private citizens? Advocates of the regulations have drummed up dozens of excuses, including concerns about underage gambling, potential fraud, and threats to financial privacy.
But as is so common with laws intended to enforce a particular moral standard, the concerns behind online gambling restrictions are blown out of proportion. Online casinos, though more independent than most businesses, still answer to both government and private regulators who ensure “fair gaming, player protection and responsible operator conduct.” And although all online casinos are headquartered in foreign countries, they often face stringent regulations imposed by the governments of those countries. These safeguards prevent most of the problems often associated with online gaming. This is evidenced by how few examples there are of abuse or misconduct taking place at online casinos.
Despite the fear mongering and dishonest tactics pursued by the Justice Department, the players are fighting back. The Poker Player’s Alliance (PPA), a lobbying organization established to fend off “egregious government intervention and misguided laws,” argues that the government’s actions constitute “a violation of due process because there are no exigent circumstances to justify deprivation of PPA members' property without prior notice and a hearing."
They’re absolutely right. Responsible adults engaging in a legal activity that harms no one should be left alone. Government exists to protect our rights, not teach us right from wrong.
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