Online Gambling

Also, the Sky Is Blue. Water's Wet. The Pope, Catholic. And Bears Shit in the Woods.

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The Justice Department is widening its net in its crackdown on online gambling, apparently now even targeting U.S. firms that helped overseas gambling sites with their stock offerings.

Meanwhile, the Wall Street Journal reports that as the biggest sports gambling day of the year approaches, it's business as usual. Sort of:

In fact, the government's war against illegal online wagering may be driving gamblers back to where they started: their local bookie.

"The likely impact is that people who previously wagered on legal, regulated sites … will now call a local bookie or bet on an unregulated site," says Alan Feldman, a spokesman for casino giant MGM Mirage.

It's true that many of the publicly traded online-gambling sites have pulled out of the U.S. market since last summer. Some have folded entirely. And the Justice Department served subpoenas to a number of investment banks that allegedly helped underwrite foreign public-stock offerings for some of the companies.

But as the kickoff at Super Bowl XLI in Miami gets nearer, the overall picture of Internet gambling has only gotten muddier. It's not just that local bookies are taking bets over the Internet. For every established Internet-gambling company that has stopped accepting bets from the U.S., others have cropped up to fill the void.

"The online-gambling ban should be renamed the Sopranos Support Bill," says Wayne Allyn Root, an outspoken professional sports handicapper in Las Vegas. "All of this money has moved to brand-new, privately held companies [that] opened overnight and [are] run by criminals engaging in fraud and organized crime."

"The crackdown has taken the online bets out of a fairly transparent set of companies and put them into companies that aren't transparent at all," adds Sue Schneider, president and CEO of River City Group, a St. Charles, Mo., Internet-gambling consultancy. "Players could be more at risk."

Prohibition of a vice has spawned risky, unregulated black markets? You don't say.

In more welcome news on the online gambling front, the European Union is considering a WTO challenge to the Unlawful Internet Gambling Act.

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  1. Let’s see…

    War on Alcohol: Repealed because it didn’t work. Mafia and Kennedy family make a fortune.

    War on Drugs: Still going strong despite millions of $$ wasted and mounting “collateral damage”. Cartels in Miami, Mexico, and Afganistan making a fortune.

    War on Terror: Still going strong even though “Mission Accomplished” declared several years ago. Crazy amounts of collateral damage in human, political and economic capital.

    War on Gambling: How could it possibly fail?

  2. In more welcome news on the online gambling front, the European Union is considering a WTO challenge to the Unlawful Internet Gambling Act.

    Oh my God, I will never say another nasty thing about the EU if they restore one of my favorite pastimes to legality. Never, ever.

    (Although I fear that the anti-gambling puritans who hold sway in the administration might try to use this to provoke a trade war or further resuscitate protectionism.)

  3. Do politicians not understand game theory? (OK, phrased that way the answer is obviously yes).

    But do they never stop to think that people won’t do exactly as they say just because they pass a rule?

    Yeesh.

  4. Pi Guy,
    You forgot the War on Poverty

  5. Is the space pope reptilian?

  6. One minor addition:

    BEARS shit on COLTS!

    Go Bears!

  7. But do they never stop to think that people won’t do exactly as they say just because they pass a rule?

    Sure they do. That’s why they pass another rule that says they get to take all your property.

    Cynical? Me?

  8. Prohibition of a vice has spawned risky, unregulated black markets? You don’t say.

    I hear that there are women who will take money for sex, even in places where it’s illegal to do so.

    In more welcome news on the online gambling front, the European Union is considering a WTO challenge to the Unlawful Internet Gambling Act.

    Fantastic. I like when Europe can stare down their nose at the US when it comes to protectionism.

  9. The EU wouldn’t probably be quite as pissy about it had the US not had a habit of grabbing non-US CEOs of foreign internet gambling companies as they pass through transit on international flights neither commencing nor ending in the US.

    In other words, we’ve been acting like a bunch of arrogant bastards when it comes to legal jurisdiction and now are reaping the result.

    Good for the EU.

    (I’m libertarian enough to be for unregulated gambling, or at least as unregulated as you have in the U.K.)

    Anyone got any idea what to do about gambling and other addicts? The only thing I can think of is a private organization that addicts register at, then have limitations placed on their behavior and monitoring….no, you can’t charge more than $100 to a credit card in less than 24 hrs, that sort of thing.

    My own experience of gambling: Las Vegas. Lost the grand total of $3 in the slot machines in an attempt to test the “beginner’s luck” theory. Suspicion now is that “beginner’s luck” is a meme carefully nutured by casinos to get people to “try it, because you might win!”

    Feh. If I want to gamble, I’ll invest in options on NASDAQ

  10. The actions of the federal government in this regard may seem drastic, but I think we can all agree that gambling is a terribly addictive activity that gnaws corrosively at the very fabric of society, wherever it is practiced. Unless it’s run by the government or private companies that contribute heavily to politicians’ campaigns, that is.

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