THE INSIDE STORY OF WHY INTERNET
BLACKACK IS ILLEGAL IN THE U.S.
by Basil Nestor
Basil Nestor is author of "The Smarter Bet Guide to Craps," "The Smarter Bet Guide to Blackjack," and other comprehensive gambling guides. Got a question? VisitSmarterBet.com and drop him a line.
Internet blackjack is prohibited in the United States. You probably noticed.
Depending on the state where you live and the game you play, technically, it may not be illegal for you to bet online. However, itís absolutely a big no-no for an Internet casino to accept bets in the United States. Why is that, and why should you care?
Besides the fact that the government has taken away a form of entertainment that you may enjoy, and forced you to schlep to a brick-and-mortar establishment when you want to play blackjack, there are deeper and more problematic consequences. SpecificallyÖ
Prohibition is VERY Bad for America
Like the sun rising in the east, like the wisdom of standing on a hard 19, this is a conclusive fact. Extensive evidence from countless sources over many decades has irrefutably proven that prohibition of alcohol and gambling in the early 1900s killed legitimate businesses, erased tax revenues, and stimulated organized crime.
Entire industries were wiped out and replaced with the Mob, a murderous scourge that persisted long after alcohol and gambling were made legal again. Prohibition always always always puts money in the hands of gangsters.
Thankfully, there has been less crime associated with the current U.S. prohibition of Internet gambling because other countries have taken the initiative to regulate and tax the industry. International regulations insure that many Internet gambling operators are honest. However, Americans still are scammed or stiffed every day. Currently, there is no legal way to resolve a dispute in the United States between a player and an offshore Internet casino. BJRipoff.com wonít pay? Too bad. Take it up with the D.A. in Costa Rica.
Another huge issue is taxes. Internet gambling is a multi-billion dollar business that could generate billions of dollars in taxes for the U.S., but we get nothing, nada, zip, zero. Itís ironic that the people who were instrumental in outlawing Internet gambling are the same people who now complain the loudest about the deficit (weíll get to that in the next section).
Yet another critical issue is our ability to compete in international business markets. Ten years ago, Internet gambling was an industry that Americans could have dominated, the same way we dominate movies, television, and software. We could have owned Internet gambling. But no. Can we get that business back? Maybe.
Whatís it All About?
From a legal standpoint, the current prohibition rests primarily on two U.S. laws. The first is the Interstate Wire Act of 1961, a law that was intended to prohibit transmission of sports-betting information via telephone and telegraph. That law has since been interpreted by the U.S. Department of Justice to include Internet gambling.
The second law is the Unlawful Internet Gambling Enforcement Act (UIGEA), passed in 2006; it was designed to choke off domestic business for Internet casinos.
Many legal scholars will tell you that current laws are vague, and "unlawful Internet gambling" is defined in the statutes as only sports betting. Furthermore, some Internet operators donít take bets; they provide the venue for a fee (such as a rake) and players bet against each other.
These legal arguments are interesting to the scholars, but irrelevant to U.S. DOJ. Here is the realityÖ Executives from Internet casinos (including poker sites) donít dare come to the United States, because they will be arrested and prosecuted.
Clearly, itís not just the laws, but the political interpretation of those laws in Washington, that are driving the current prohibition. Whatís going on? Letís point some fingersÖ
Assign Blame Here
Arizonaís Republican senator Jon Kyl and his cohort in the House, Representative Bob Goodlatte (R-VA) are the primary culprits responsible for destroying domestic Internet gambling in the United States.
The land-based casinos played a role at one point. Ditto the horseracing industry and other special interests. Legislators such as Jim Leach (R-IA) and Bill Frist, the former Republican majority leader in the Senate, did their parts. Nevertheless, Goodlatte and Kyl have always been the main guys at the legislative head of the movement.
Back in 2002, Sen. Kyl said, "Internet gaming encourages addiction, leads young people to build up massive debts they cannot pay, is rife with fraud, and has strong links to organized crime."
At about the same time, Rep. Goodlatte called Internet gambling prohibition "vital to protect our children and communities from the problems of addiction, crime, bankruptcy, and family difficulties that come from gambling."
Notice that these two gentlemen were making arguments then (and still are today) that are identical to arguments made against physical casinos. When you study the details of their statements going back years, itís clear that theyíre against all gambling. Since they canít eliminate all of it, theyíve chosen to focus on the Internet.
In 2006, Goodlatte, Kyl, and a few other Republicans stealthily (some would say secretly) passed UIGEA by attaching it to an unrelated anti-terrorism ports bill. The legal trickery was done at 9:29 p.m. on September 29, 2006, a few hours before Congress adjourned for elections. Most of the legislators had no idea they were voting to kill Internet gambling. The SAFE Port Act was passed 409-2 in the House and by unanimous consent in the Senate.
Itís not a good law. Literally, itís poorly written. It even has typos. Treasury and Justice Departments in the Bush and Obama administrations were not keen to enforce the mish-mash. Then Senator Kyl pushed things farther. In 2010, all by himself, he blocked Senate confirmations to key positions at the Treasury Department until Treasury Secretary Timothy F. Geitner relented and promised to move ahead with implementing UIGEA.
Internet Gambling was thrown under the bus to keep Treasury working during the recession. The recent indictments against gambling sites including PokerStars, Bookmaker, and DoylesRoom are the sad result.
Things wonít change until you join the fight. Our country needs the tax revenue. Our economy needs the business. And our society will be safer when Internet casinos are regulated and itís legal to play blackjack online.
Contact your Congressional representative and senators. Tell them you want UIGEA off the books. Tell them you support legislation to regulate and tax Internet gambling. Be polite but persistent. Follow up and organize.
A great way to do that is to join the Poker Players Alliance. You can find them online at theppa.org. PPA will provide you with legislative alerts and other tools to help you stay on top of this issue.
Go aheadÖ Hit that hand!
(c) copyright 2011 Basil Nestor
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