Online Poker's Real Victim Is the Government


So argues Andrew Cohen at The Atlantic.

There are plenty of victims of (allegedly) illegal online poker, starting with the desperately-short-of-cash federal and state governments which are deprived of all the taxable revenue ($3 billion, say the feds) from the now-suspected operations.

This is wrong on a number of levels. First, the only reason federal and state governments are being "deprived" of taxable online poker revenue is because they've made the activity illegal in the first place. Second, if we were all morally upstanding citizens who obeyed the law like we're supposed to (the larger theme of Cohen's post), those taxable revenues wouldn't necessarily exist in the first place. I suppose some online poker players would spend their money on other things, most of which would be taxed. But that isn't a given. And some of the money won by U.S. players came from overseas players.

Cohen also says casinos and dog racing are "victims" of online poker. I doubt poker is a common substitute for betting on dogs. Casinos may have lost some money to online poker, but I also doubt it's all that much. Online poker is a different game than in-person poker. And it seems unlikely that a high percentage of the people playing at home in their boxers would otherwise be playing in a casino. It's more likely they'll be playing in a neighborhood game. (At least until the SWAT team comes.) In fact, I'd, er, wager that online poker has actually helped the casinos, in that it has brought millions to the game who otherwise wouldn't have patronized a casino. (Because it's a game that involves some skill, poker also doesn't have the profit margin of other casino games, where the house can set the odds. Before the poker craze, which was driven mostly by televised poker and online poker, the game wasn't a major source of revenue for casinos.)

Cohen's other point basically boils down to "the law is the law", and that we shouldn't allow people to openly flout it. True enough, I guess. I presume this means Cohen believes the millions of Americans who routinely ignored the law by playing online poker should be arrested, too.

The Unlawful Internet Gaming Enforcement Act also wasn't exactly passed after an honest national debate about the merits and harms of online poker. It was tacked on to a port security bill, then passed in the middle of the night on the last day of that particular session of Congress. Your option as a senator was to vote for the ban, or vote against it—and also vote against funding security measures for the country's major ports.

Finally, if Cohen wants to talk about liars, he'd be better off pointing his finger at the politicians who pushed the online gambling ban. The (mostly) Republicans who sponsored the ban dishonestly cited the need to cleanse the Congress of Jack Abramoff. Abramoff, you may remember, is the disgraced lobbyist whose clients included Indian casinos and state lotteries. It was rich listening to these GOPers talk about how they were going to absolve themselves of their party's corruption . . . by banning people from playing online poker.

Thing is, they ended up passing the very bill Jack Abramoff was lobbying for: a ban on online gambling, with carve-out exemptions for politically-powerful interest groups like horse racing, state lotteries, and fantasy sports. (The American Indians got screwed in the deal—again.) The bill's supporters also claimed online poker sites were rife with money laundering and terrorist activity—with zero actual evidence, of course.

Finally, if Cohen's looking for dishonesty, he might also look to Rep. Spence Bauchus (R-Ala.), who tried to blame online poker for the fact that minors were playing poker in pool halls 30 years ago.