Arguments for Legal Online Gambling

November 20, 2013 Posted in Gambling Law by No Comments

Some countries in the world are very anti-online gambling while others are very much in favor of online gambling. In the countries in which online gambling is illegal, fierce debates rage about the pros and cons of legalized and regulated online gambling. Most notably, the United States has been the focal point of the online gambling debate.

I strongly believe there are many good reasons to legalize online gambling. Here’s why:

1. The ban on online gambling is hypocritical

The current laws and regulations against online gambling are hypocritical to the max. First of all, the same politicians that are always proclaiming America to be the “land of the free” have no right to tell us what we can and can’t do with our money in our own homes.

The founding fathers originally set up the federal government as a very limited entity whose only job was to regulate interstate commerce, defend the nation and protect individuals from having their personal freedoms infringed upon. Nowhere in the Constitution was the federal government given the power to protect us from ourselves or to legislate morality.

Secondly, the ban on online gambling is hypocritical because the government has no problem with land based casinos that operate all over the country. Online gambling is only the natural progression of technology today. It makes no sense to say that in-person gambling is perfectly fine, but it suddenly becomes a crime when done online? Right….

On top of that, the same laws that attack online poker and online gambling have specific exemptions carved out for online horse racing betting. That’s right – companies that exist on American soil are able to operate online horse betting parlors that cater to US citizens. Once again, I must ask: how does online horse racing gambling pass the legality test but not online poker or online gambling?

Here are three notable exemptions that were carved out of the UIGEA:

  1. Fantasy sports gambling
  2. Online lotteries
  3. Online horse racing gambling

The hypocrisy that surrounds the “ban” on online gambling is astounding. There is no legitimate reason why the above three activities have received exemptions while poker, gambling and sports betting are treated like pure evil. Here’s a great article that explains the hypocrisy of the gambling ban in detail.

Another example: Jon Kyl, one of the authors of the UIGEA fought hard to make sure fantasy sports gambling received a carve-out. Jon Kyl is known for having received many political donations from that industry. The MLB spent much of 2006 trying to make money off the fantasy betting industry by suing them for licensing fees for using players’ names and stats. There’s enough corruption in here to make the eyes bleed.

PS – Check out the Facebook page of Bill Frist, another one of the authors and primary supporters of the UIGEA. Apparently I’m not the only one who’s a little irritated by his hypocrisy.

2. The ban on online gambling does the opposite of what it’s supposed to do

Politicians have argued repeatedly that the ban on online gambling is necessary because it protects us from a variety of boogeymen such as underage gambling, shady overseas operators and gambling addiction. Not surprisingly, the ban on online gambling has actually made these problems more difficult to combat.

Instead of having an open, legal market for online gambling, US citizens now have to resort to playing at offshore gambling sites that operate largely free from regulation. Most major gambling sites are safe places to play thanks to free market forces, but it would still let us all rest much easier if the US government would allow American companies to set up shop.

In a legal and regulated environment, online casinos would have to follow strict standards when it comes to safety, underage gambling and problematic gambling. In the current black market environment, there are no specific standards for dealing with these issues. Some casinos take a more active approach than others in these areas.

Some politicians have argued that online gambling would make it too easy for kids to get online and become helpless gambling addicts. This argument is weak because there are plenty of mechanisms that could be used by online casinos to prevent minors from gambling. Additionally, this argument is comparable to outlawing alcohol consumption among adults because minors can use fake IDs to get booze.

The prevalence of problem gambling appears to be the strongest argument against legal online gambling, but even that argument breaks down upon closer inspection. First of all, problem gambling has not destroyed society in the UK since the UK legalized online gambling. In fact, several major studies have shown either zero increase in problem gambling or an increase so minor that it borders on statistical insignificance.

3. The online gambling ban does not stop online gambling

Bans and prohibitions have been proven time and time again to be completely ineffective. The US alcohol prohibition in the early 1900s did not stop people from drinking and the current drug prohibition has been completely ineffective. Therefore it shouldn’t be a surprise that the online gambling prevention hasn’t stopped people from gambling online.

Wherever there is a demand for a product, enterprising people will find a way to meet that demand. It doesn’t matter if the product is legal or illegal; someone will always step up to give customers what they want.

So now that every argument the politicians make has been thoroughly debunked (and they know this), why do they continue to push for a ban on online gambling?

Perhaps it’s because many of the people pushing against online gambling have something to gain. In the early days of online poker, land-based casinos were some of the biggest supporters of anti-poker legislation – presumably because they feared losing business to online poker. In the end, online poker proved to be a major contributor to the popularity of live poker and most of the major land-based casino companies changed their tune years later.

4. Online gambling is not taxed and sends revenue overseas

It’s hard to believe, but some politicians actually use this argument in favor of gambling prohibition. Hmmmm, maybe they could simply legalize, regulate and tax online gambling in the United States. The entire reason online gambling doesn’t generate tax revenue is because it is illegal! I swear it sometimes seems like politicians say things like this just to see how much they can get away with.