The GOP's Bad Bet

The online gambling ban could put the Democrats in the winner's circle

In the wee hours of the last night of the last session of Congress, Majority Leader Bill Frist attached a ban on Internet gambling to a port security bill.

It was a dubious maneuver, which not only prevented any real floor debate over the ban, but also attached an intrusive, unnecessary, big government measure to a bill that addressed important national security concerns. This meant that any senator who held the position that what Americans do with their own money in their own homes on their own time is none of the government's business couldn't vote against the gambling ban, lest they risk being smacked about the head with the "soft on national security" cudgel.

If Frist's move was underhanded, it was also wholly appropriate, given the way the GOP has handled this issue. The debate—to the extent that there has actually been one—has been marred by misdirection, red herrings, and a certain obliviousness among the bill's supporters to, well, reality.

The two Republican congressmen pushing the ban in the House of Representatives, for example—Rep. Jim Leach and Rep. Bob Goodlatte—tried for months to sell the ban as an effort to exorcise the scourge of Jack Abramoff from the Congress and the Republican party, as if Abramoff were the reason the bill never passed in the first place.

In fact, the bill we now have is nearly identical to the bill Jack Abramoff would have wanted. The bill bans online poker, sports wagering and casino games, but doesn't touch state lotteries or horse racing (which, by the way, has in the past made some meaty contributions to Rep. Goodlatte's campaign chest).

Contrary to what Reps. Goodlatte and Leach would have us believe, the bill Jack Abramoff was pushing was also a prohibition on poker, sports wagering, and casino games. And it also contained exemptions for state lotteries, as requested by one of Abramoff's clients, eLottery.

It only gets worse from there. When the lobbying reform package fell apart, the Republicans tried a new approach, bundling the ban with flag burning, gay marriage, and a number of policies on the GOP social agenda as part of the "American Values" agenda. That's how it passed the House.

In the Senate, Frist first tried to attach the ban to a bill reauthorizing funding for U.S. troops in Iraq. When that didn't work out, he fell back on the last-minute port security bill.

In addition to invoking Abramoff, the ban's supporters frequently invoked the "for the children" canard, and relayed anecdotes about problem gamblers who frittered away their kids' college education with online wagers. In truth, there has yet to be a significant peer-reviewed study of online gambling habits, and whether they're more or less conducive to addictive behavior (there have been studies of state lotteries, however, and most show them to be among the most addictive forms of gambling).

Most online wagers are made in poker rooms. Poker is a game with some element of chance, but with a significant component of skill. Good poker players will turn a profit, which is why lots of people make a living playing the game (as opposed to say, slot machines or roulette).

Poker professionals—three of whom came to D.C. earlier this year to speak against the ban—argue that the game isn't really gambling at all. At the very least, it's not a particularly addictive form of wagering. Of course, some (like me) would argue that the nature of poker is beside the broader point: preventing people from playing games of chance simply isn't a legitimate function of the federal government.

At the very least, there are surely items on the DOJ's agenda that ought to be of higher priority—fighting terrorism, for example.

Reps. Leach and Goodlatte, along with Sens. Frist and John Kyl, frequently used the words "untaxed" and "unregulated" when describing the estimated $12 billion Americans wager each year online. But they're "untaxed" and "unregulated" because Congress made online gambling illegal in the first place, pushing gaming sites offshore.

In fact, the major gaming sites are begging to be both taxed and regulated. They'd much rather set up shop in the U.S., pay U.S. taxes, and be subject to U.S. laws and regulations. They'd rather carry the seal of legitimacy that comes with being recognized and incorporated on U.S. soil. Were online gambling legalized and regulated, we'd likely see trusted names like Harrah's, Bally, and MGM get into the business.

Despite all of the dire warnings from the ban's supporters about fraud, graft, and preying on minors, this bill will actually make all of those problems worse. Many of the major gaming sites are publicly traded, and/or incorporated in countries like Great Britain or Canada. They are taxed and regulated, just not by the U.S. government.

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