This reviewer is all for the U.S. regulating online casino play and I believe it should have been accomplished decades ago. There are three reasons it has not been normalized to date: Money, money and fear. The first money was the land based interests being in fear of losing their sacred cash cows. Because they didn’t understand how to enter the market, they got their ‘well supported’ Congressmen and Senators to slip a willy into the Safe Ports Act called the UIGEA, or Unlawful Internet Gambling Enforcement Act making it a federal crime for financial institutions to process money in or out of illegal gambling establishments. The only problem with that approach is that the courts have held for years, and the Justice Department confirmed over a year ago, that online casinos are not illegal under any federal law. Hawaii, Utah, and Washington state have laws against online casino gambling – but it is very much legal as a national matter.
Three states (Delaware, Nevada and New Jersey) now have laws specifically authorizing online gaming although the regulatory elements are not in place with Nevada’s law to administer anything but poker – slots and other games are not precluded by the law contrary to most popular beliefs. There is simply no regulatory framework in place, all casino games are legal under the Nevada law.
The second “money” element is taxation, and no one has that figured out yet. New Jersey is going to tax at such a rate that players will simply find better games from the existing providers, legal or not. Without an absolute monopoly and strict enforcement, high taxing jurisdictions are bound to fail due simply to the fact that the money has to come from somewhere and that is ultimately the player. Poor promotions, lower return to player percentages, bad compensation programs – the taxes will be paid from these elements that help a player determine where to play.
The fear element is simply that the people who can pass a uniform gambling act in the US are afraid to go against conventional wisdom that tells them online gambling is not a popular pastime and that they will lose their seats (no pun intended) if they are seen to endorse or promote the activity.
We do now see movement toward normalizing online gambling in the states. This is only happening because the brain-trusts that control the legal gambling market in America have realized that people are going to play no matter what, that billions in cash are escaping to offshore companies, and that they actually can enhance their land-based revenues with a promotional online element. Imagine the jackpot flasher announcing that you have just been entered into a small sweepstakes where the winner will be flown to Las Vegas, Atlantic City, or Macau for an all expenses paid 2 week vacation. They can also offer perks and comps based on online loyalty and other factors to draw the players in.
This paradigm shift has not only occurred because the executives have suddenly become enlightened, it was also driven by the fear that social media like facebook would give players an alternative that they had not imagined almost a decade ago when they got their shady earmark of UIGEA.
Now, we see some of the first manipulations to clear the stage of “Bad Actors” and make room in the US market for a small handful of providers. This is war to them as evidenced by the techniques we are seeing. First, demonize the ‘enemy’. Today we see a blog on The Hill, a Washington D.C. “News” site (propaganda machine) doing a good job of showing us what is to come. It is full of misinformation spewed by the new “proponents” of online gambling regulation as well as absolutely asinine statements by the blogger thrown in as if they were facts.
“Users of gaming websites are largely anonymous, which can allow criminals and terrorists to use the sites to hide the sources of their money.”
Where in the world did you get that information blogger? It is simply not true, as anyone who has ever cashed out from an online casino will tell you. Even the shadiest of clip joints will insist upon identity verification that nearly surpasses that which you need to open a bank account in America. The thing about laundering money is you have to be able to pull it back out of the washing machine, not just dump your funds at an automat and walk away never to return. Ludicrous.
The esteemed Senators and law enforcement spokespeople who weighed in were just as surreal in their statements.
“…when I think about the possibility for money laundering, terrorism, drug trafficking and the potential for children to get access to use the Internet…” Sen. Kelly Ayotte (R-N.H.).
“…We also know that terrorist organizations are or could be using the same strategies to launder funds.” Chuck Canterbury, president of the Fraternal Order of Police
“If we do not, this illegal market will continue to grow where millions of consumers are put at risk and criminals can act freely.” Sen. Dean Heller (R-Nev.)
“…prevent the abuses and wrongdoing that clearly are inherent, almost inescapable, in this form of gambling…” Sen. Richard Blumenthal (D-Conn.)
The list of erroneous hyperbole goes on and on from that one article. But it gives us an insight as to what will occur and how they will accomplish it.