Nanny State

Bill to Legalize Online Gambling Advances

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Yesterday the House Committee on Financial Services approved the Internet Gambling Regulation and Consumer Protection and Enforcement Act by a vote of 41 to 22. The bill, sponsored by the committee's chairman, Rep. Barney Frank (D-Mass.), would make online gambling (except for sports betting) legal at the federal level while allowing states to prohibit betting within their borders. The committee members who voted yes (PDF) included 34 out of 42 Democrats (81 percent) and seven out of 29 Republicans (24 percent). The New York Times, which headlined its story (a bit hyperbolically) "Congress Rethinks Its Ban on Internet Gambling," portrays the development as a sign that legislators are desperate for new sources of revenue. A companion bill, the Internet Gambling Regulation and Tax Enforcement Act, would authorize the collection of fees and taxes from online gambling businesses, while players' winnings would be taxable as income. The Joint Committee on Taxation estimates that legalizing online gambling would generate $42 billion in federal revenue during the first decade.

The Senate version of Frank's bill, sponsored by Robert Menendez (D-N.J.), has not had a hearing yet.  Anti-gambling moralists nevertheless sound worried:

Opponents, who only four years ago, when Congress was controlled by the Republicans, secured a law that banned the use of credit and debit cards to pay online casinos, said they were aghast. "People sometimes resort to drastic things when they are strapped for cash," said Representative Robert W. Goodlatte, Republican of Virginia, who called the new proposals "unfathomable."…

The committee's top Republican, Representative Spencer Bachus of Alabama, noting the passage of far-reaching changes in financial regulation this month, said that "after all the talk last year about shutting down casinos on Wall Street," he was incredulous that members would vote to "open casinos in every home and every bedroom and every dorm room, and on every iPhone, every BlackBerry, every laptop."

Which is the party of free markets again? Frank is no more consistent in that respect than Goodlatte or Bachus, but on this issue (and marijuana), he gets it. "Some adults will spend their money foolishly," he says, "but it is not the purpose of the federal government to prevent them legally from doing it." Or as he put it back in 2006, responding to the argument (made by Iowa Republican Jim Leach) that online gambling is worthless because it does not boost GDP:

If an adult in this country, with his or her own money, wants to engage in an activity that harms no one, how dare we prohibit it because it doesn't add to the GDP or it has no macroeconomic benefit? Are we all to take home calculators and, until we have satisfied the gentleman from Iowa that we are being socially useful, we abstain from recreational activities that we choose?…People have said, "What is the value of gambling?" Here is the value: Some human beings enjoy doing it. Shouldn't that be our principle? If individuals like doing something and they harm no one, we will allow them to do it, even if other people disapprove of what they do.

More on Frank's bill here. I analyzed the online gambling crackdown in the June 2008 issue of Reason.

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  1. If individuals like doing something and they harm no one, we will allow them to do it…

    Am I being oversensitive or does Frank’s language reek of authoritarianism?

    1. To politicians, allowing something is the same thing as not prohibiting it.

      I actually think Frank speaks quite well on gambling and cannabis issues. To bad he is so awful on most everything else.

      1. Yes, but you forget who will be ruling over Hell and not serving in Heaven.

  2. “online gambling is worthless because it does not boost GDP”

    Neither does any playing football. Ban that fucker!

    1. Point noted http://www.case-diy.com, but don’t you think technology and innovation are going to be the dominant factors in future health care costs? I can’t imagine health care even remotely resembling what we have now in 2025.

    2. Reality has a well-known teabagger bias.

  3. I guess those GOPers didn’t get SIV’s memo that their party is the party of “teh freedom!”

    1. Feeble effort. Go back three spaces.

  4. Am I being oversensitive

    No. Whenever he deploys libertarian-ish talk to justify whatever he got paid most to vote for, it doesn’t come out naturally. Douche tells.

  5. Dems wouldn’t alow this if they could not tax it. That is their only concern. Freedom has nothing to do with it. As usual, my view is, find allies where you can find them. Whatever the reason, the 81% of Dems and 24% of Repubs ended up doing the right thing.

    1. Dems wouldn’t alow this if they could not tax it. That is their only concern.

      This. All they see is revenue.

  6. They still propose to continue the ban on online sports wagering.

    Half a loaf…

  7. “Some adults will spend their your money foolishly…”

  8. This is an excellent example of what I mean when I say that the occasional “liberaltarian” exception to the statist’s otherwise monolithic “whatever is not forbidden is required” belief system is ideologically incoherent.

    (1) What justification is there for continuing the ban on sports betting?

    (2) Frank says that the feds should not prevent people from spending their money foolishly, yet votes for legislation (the health care reform bill) that requires them to spend their money responsibly (on health insurance) or give it to the federal government (he supports higher taxes by allowing the Bush tax cuts to expire). Is it their money to do with what they want, or not?

    1. I can’t wait to take the money I save by not buying health insurance to gamble on cheerleading competitions.

    2. Allowing temporary tax cuts to expire is not a tax increase any more than laying off Census workers after the count is done is a spending cut.

      1. Tulpa, I ran my numbers for next year. Once the tax cuts expire, my tax bill will go up $7,000.

        How is that not a tax increase? Show your work.

        1. Hey RC, read their lips, it’s not your money.

        2. Tulpa, I ran my numbers for next year. Once the tax cuts expire, my tax bill will go up $7,000

          You aren’t that stupid. So stop playing dumb.

          The tax cuts were passed with sunset provisions. They were never meant to be permanent. They were always supposed to be temporary to have a stimulative effect.

          So it isn’t a tax increase…it’s losing a temporary tax discount

          That’s like pretending that when an item goes on sale, and the sale ends and price goes back to the normal price, that’s a “price increase”.

          Only if you’re an idiot would you say that.

          1. I have to disagree, CT.

            My taxes will be higher next year. They have increased. Thus, there has been a tax increase. The fact that the increase was announced years ago makes no difference.

            When a sale item goes back to full price, its price has increased. I don’t think its an abuse of language at all to say “That’s on sale this week and you can get it for $20, but its price will go back up to $40 after the holiday.”

            1. I think the point that they’re trying to make is that there’s no tax increase relative to the levels there was before the tax cuts – a valid point, but not very helpful in the reality of our economic situation.

          2. Only an idiot would say something going up isn’t an increase.

    3. Frank Translation: “You can do what you want with the money I let you keep.”

    4. And votes against allowing them to invest their money foolishly in the stock market.

  9. I wonder if Congress will ever pass a bill that doesn’t have “Consumer Protection” in the title?

    1. It’s probably a 900 page piece of shit that should be one line “repeal gambling prohibition Act Whatever.”

  10. “The bill, sponsored by the committee’s chairman, Rep. Barney Frank (D-Mass.), would make online gambling (except for sports betting) legal at the federal level while allowing states to prohibit betting within their borders.”

    Didn’t a Federal Judge just rule that The States can’t pass laws that differ from Federal law?

  11. The bill, sponsored by the committee’s chairman, Rep. Barney Frank (D-Mass.), would make online gambling (except for sports betting) illegals legal at the federal level while allowing states to prohibit betting illegals within their borders.

  12. Bill to Legalize Online Gambling Advances

    Who is this shameless man Bill, and why is he exposing my virtue to cads making risky advances online?

  13. The bill, sponsored by the committee’s chairman, Rep. Barney Frank (D-Mass.), would make online gambling (except for sports betting) legal at the federal level while allowing states to prohibit betting within their borders.

    This provision is known as the “Prevent Competition With State-Run Lotteries” exception.

    It will be interesting to see how a state could enforce such a prohibition.

  14. If individuals like doing something and they harm no one, we will allow them to do it…

    Can we have whores too?

    1. At your service!

    2. Barney says yes!

      Google: “barney frank” + suckered

  15. Although I firmly believe that we should be able to do what we want in our own homes, I can’t help but wonder if this would just be a way to create more people that the government has to support financially because they can’t control their habit.

    1. government has to support

      It doesnt have to.

    2. Although I firmly believe that we should be able to do what we want in our own homes, I can’t help but wonder if this would just be a way to create more people that the government has to support financially because they can’t control their habit

      This type of “logic” could be applied to anything.

      Shopaholics, alcoholics, somkers, overeaters, etc.

      1. And it will.

  16. I suppose it’s a waste of time to observe that the federal government has no business prohibiting (or otherwise regulating) gambling in the first place, isn’t it? The argument that “we have no business interfering if people want to spend their money foolishly” is perfectly proper at the state level, but we shouldn’t even reach that question with regard to the federal government.

  17. I suppose it’s a waste of time to observe that the federal government has no business prohibiting (or otherwise regulating) gambling in the first place, isn’t it?

    I would be fascinated to read the argument that gambling is “commerce.” What are the goods and services that are being bought and sold, exactly?

    1. The same ones that Goldman Sachs and the other bankers who trade home mortgage packages, lose billions of dollars, and then come to the taxpayers to get reimbursed for their losses. The difference here is that online gamblers, who lose, won’t get any bailouts from the taxpayers.

  18. “Some adults will spend their money foolishly,” he says, “but it is not the purpose of the federal government to prevent them legally from doing it.”

    Oh brother. This from a guy who thinks the wisest way for us to spend our money is to hand it over to his crowd for proper distribution. Frank is one of the original nanny staters. There’s nothing he likes better than telling everybody what they can and can’t do. So, excuse me if I have to ask, what’s in it for you, Barney?

  19. “Some adults will spend their money foolishly,” he says, “but it is not the purpose of the federal government to prevent them legally from doing it with the money they have left after we get our cut.

    Fixed it for you, you poof.

  20. “…responding to the argument (made by Iowa Republican Jim Leach) that online gambling is worthless because it does not boost GDP:..”

    Did Jim Leach vote for the TARP bailout? Just what addition to the GDP did and does Goldman Sachs and the European bankers/traders of mortgage packages or other products, who bilked the taxpayers from multi-millions in TARP money, add to the GDP when they lost money causing the 2008 financial crisis from the housing bubble collapse? And, have since passed ‘financial reform’ legislation that ensures their continuance to again be bailed out by the taxpayer under the new financial ‘reform’ package wherein now they don’t even have to get Congressional approval, because the Secretary of State can decide it is too big to fail.

  21. Greaat article. Thank you…

  22. Point noted, but don’t you think technology and innovation are going to be the dominant factors in future health care costs? I can’t imagine health care even remotely resembling what we have now in 2025. http://www.case-diy.com

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