Tuesday, May 01, 2007

The Usual Crap

I posted this over at the UltimateBetBlog as well, but I figured I'd let yinz read it here too:


One of online gaming's most powerful opponents, Senator Jon Kyl of Arizona, published an article yesterday in the National Ledger titled, "Online Gambling: Will New Law Be Repealed - Don't Bet On It". The title's ghastly punctuation aside, I have a few quibbles with Sen. Kyl's piece and would like to address them here.

But before I begin, I must raise this hilarious point--the Senator's article is of course anti-gambling, but scattered throughout his piece are little hyperlink advertisements...promoting online gambling. If you read the article and let your cursor linger over the highlighted words "offshore gambling", for example, you'll get a little pop-up add for an online gaming site offering a deposit bonus. Un-believable.

Anyway! Sen. Kyl's article begins thusly:

"Last week, Arizona authorities raided four illegal online gambling rings, centered in Phoenix but operating in three states, seizing millions of dollars in cash, cars, and property. Maricopa County Sheriff Joe Arpaio said millions of dollars were being collected, and often extorted, from gamblers visiting online sites based overseas. This recent crackdown highlights one of the major problems our state and local authorities face: enforcing existing state laws prohibiting gambling over the Internet."

If you'd like to read about those raids you can click here and here. And when you DO read about them, you might find yourself thinking the same thing I did--why is Sen. Kyl using these raids as evidence that anti-gaming laws are a GOOD thing? Because one of the major arguments AGAINST prohibiting gambling was that these laws would force out honest, reputable operators and leave the field wide-open to exploitation to unscrupulous and/or criminal enterprises.

According to one of the articles, those arrested in the raids were charged with crimes that included conspiracy, money laundering, and extortion. Now, no online gaming company I know of has asked that conspiracy, money laundering and extortion be legalized. Because no online gaming company is in any way INTERESTED in engaging in conspiracy, money laundering, and extortion. They want to provide the best gaming experience possible for their customers--extortion isn't exactly one of their core competencies, to trot out some of my old B-school lingo. But extortion and loansharking and threats of violence ARE core competencies of criminal organizations. And this is what society reaps when it tries to legislate away activities that millions enjoy and consider harmless.

The Senator continues:

"Until recently, authorities were forced to search for other violations – in this particular case, money laundering and extortion – to go after criminals trying to evade our laws prohibiting gambling over the Internet."

Well, why? Why were authorities forced to search for other violations? Why didn't they just enforce the laws on the books prohibiting online gambling? Or...could it be that there WERE no clearly-defined laws about online gaming?

"Last October, the President signed into law the Unlawful Internet Gambling Enforcement Act (UIGEA), culminating a 10-year effort by Congress to provide law enforcement with the means to stop offshore gambling businesses from circumventing our existing federal and state gambling laws. The Justice Department is now working to draft regulations to implement this new law."

First of all, what does it say that after a "10-year effort by Congress" the UIGEA passed only after former Senate Majority Leader Bill Frist tacked it on to an anti-terrorism bill at the last minute? Second, what "existing federal and state gambling laws" were online gambling sites circumventing? Why didn't federal and state law enforcement, well, enforce those laws? Could it be, again, that there aren't clear, enforceable laws?

Sen. Kyl seems to confirm that idea when, a few sentences later, he writes,

"The bill did not, as some have alleged, make online gambling illegal. Online gambling is already illegal under existing federal and state laws. The UIGEA simply provides the legal mechanisms necessary for authorities to enforce those laws."

OK, the Senator says that the UIGEA will give law enforcement the means to enforce existing laws. And how will the UIGEA bestow these powers?

"Principally, the UIGEA requires financial systems to block fund transfers associated with illegal Internet gambling, which is the most effective way to curb illegal activities of offshore websites beyond the reach of traditional law enforcement."

So...how does this help authorities enforce existing laws? It makes it harder for people who want to gamble transfer funds to their favorite online gaming sites, but that only serves to "curb" these nefarious people from, well, doing what they want with their hard-earned money. Plus, the onus falls not on law enforcement but on financial service providers, who risk angering their customers by, again, denying them the right to do what they want with their money.

Later Sen. Kyl writes:

"But some online poker operators are lobbying Congress to exempt online poker from the UIGEA. They allege it deserves an exemption because poker is "a game of skill" and an "American tradition." There are several reasons why Congress should reject this claim. Exempting online poker would undermine state gambling laws, making it much more difficult, if not impossible, for states to enforce their laws against gambling on online poker, and would override any policy decisions made by state legislatures."

While I stand and applaud the Senator's concern for state's rights...doesn't the UIGEA tramp all over the rights of states who DON'T have laws restricting online gambling? What if, oh, Rhode Island passed a law making online gaming 100% legal. Wouldn't the UIGEA "override any policy decisions made by state legislatures"?

Now, Senator Kyl is a politician and, therefore, needs the support of the voters every six years. And so he tries to show that he really has nothing against the great American game of poker:

"It is important to note that the UIGEA does not affect online poker for entertainment. If a poker player does not bet with a gambling entity or stake anything of value on the game, it does not constitute "gambling" and does not violate the law."

Got that? So long as you don't stake "anything of value", poker is hunky-dory. Of course, how one defines "anything of value" is rather open to interpretation, yes? One could argue that one's time is invaluable, and so even if no money is involved there is a price that is paid. What if you play for pistachios instead of quarters? I love me some pistachios, but my friends are more into cashews. Am I breaking the law here?

Maybe not, because Sen. Kyl then says, "Your Saturday night poker game is not affected." It isn't! Great! But...what if the buy-in for my Saturday night poker game is $500? Is that OK? How about $5,000? Is that cool? Or am I going to have a SWAT team breaking down my door? Am I going to be listed in the paper as running a criminal enterprise? Who decides how big the stakes should be: the players in the game, or Jon Kyl?

And then, of course, the Senator trots out the studies:

"Online poker is currently the most addictive form of gambling activity among American youth. The National Annenberg Risk Survey of Youth (ages 14 to 22) over the last few years has identified rising trends in poker and Internet gambling as significant and worrisome."

Really? Because I actually looked up the Survey online and it said the following:

"According to the latest results...the overall percentage of male youth ages 14 to 22 who reported playing cards for money on a weekly basis DROPPED (emphasis mine) to 11.6% in 2006 from 12.5% in 2005."

It also said:

"Similar patterns were observed for gambling on the Internet...(A)though weekly use of Internet gambling sites held steady among all male youth (2.5% vs. 3.0% in 2005 and 2006 respectively), the pattern diverged for youth depending on age. For males under the age of 18, weekly use of Internet gambling DECLINED (emphasis mine) from 2.6% in 2005 to 0% (emphasis mine) in 2006. However, rates of Internet gambling rose among male youth over the age of 17 from 2.3% to 5.8% in 2006..."

So, let's get this straight. The number of young males playing cards has DROPPED in the last year. But Sen. Kyl called this a "rising" trend. The number of young males playing poker online has increased...but only among those older than 17. The number of those younger than that (who should not be able to play online in the first place) saw their numbers fall to ZERO PERCENT in 2006. Now, I find that goose egg to be a bit suspicious, but it certainly shows a sharp decline. And you can't say the UIGEA is responsible--it wasn't signed into law until October. Could it be that online gaming sites were doing a better and better job of identifying and blocking underage gamblers? It's possible...

I'm also amused at how, in our society, we consider people between the ages of 18-22 "youths" when it comes to things like gambling, but when it comes to carrying an M-4 carbine around Baghdad and busting down doors looking for insurgents, we call them "Marines". But that's a post for another day.

Let's look at the numbers of young people who actually ARE playing poker online. The percentage rose from 2.3% to 5.8%. So, about 1 in 17 young men between the ages of 17 and 22 play poker online. This is "significant" and "worrisome"? And could it be that more young people are playing poker because...poker as a whole has become more popular? Young people following a trend, that never happens!

And how many of these young people are dropping out of college to go pro, and how many merely play the odd $5 sit-n-go between chem labs? How many truly develop into "problem" gamblers?

Well, that depends on how you define "problem". And here's how the Annenberg Study defined it:

"If respondents had engaged in one or more specific gambling activities in an average month, they were asked four questions about difficulties related to their gambling. These items asked whether in the past year the respondent had (a) "often found yourself thinking about gambling," (b) "ever needed to gamble with more and more money to get the excitement you want," (c) "ever spent more than you had planned on gambling," and (d) "ever felt bad or fed up when trying to cut down or stop gambling?"

So, if you play poker online, and someone cracked your Aces with 8-4 offsuit, and you brooded over it later that night, you are a problem gambler. Welcome to the club!

I don't mean to be flip about gambling addiction, which of course is a very real concern. But the people most likely to ignore laws banning online gambling, and those most likely to be exploited by unscrupulous operators, are gambling addicts. If online gaming were legalized and regulated those people could be more easily identified and possibly given the help they need. Again, the arguments put forward by those in favor of prohibition in fact support the legalization and regulation of gambling.

And then, at the end of his piece, Sen. Kyl rather shoots himself in the foot:

"And finally, if poker gambling enthusiasts truly believe it is a "game of skill," they can gain an "exemption" by proving that to a court. Under most definitions of "gambling" in state laws, games of skill are not "gambling" even if there is an entry fee and a prize to be won. While poker, like other card games, involves an element of skill, the hands that win or lose are a result of chance – "the luck of the draw." If enthusiasts could prove otherwise to the satisfaction of a court, then they would not be subject to online gambling restrictions."

First of all, there's an element of luck in ANY game. Tee shots land in divots, a tipped pass can turn into a touchdown, a stray pebble can transform a routine ground ball into a game-winning base hit. And to deny that luck doesn't play a role in poker is to deny the game one of it's charms. But as even Sen. Kyl concedes, poker contains an "element of skill". There is such a thing as a "good poker player". And there are, in fact, "great poker players". Phil Hellmuth, Doyle Brunson and Johnny Chan don't each have ten WSOP bracelets because they're the three luckiest human beings on Earth. They have all that bling because each is a supremely gifted poker player.

Sen. Kyl might think he's correct when he says "the hands that win or lose are a result of chance", but in fact that statement shows his ignorance of poker. Because in poker the best hand often DOESN'T win. Because a superior player outplays his opponent. Or, maybe the better player loses the hand...but he loses far fewer chips than a lesser player would've lost. Or maybe the tables are turned and it's the better player who holds the cards...and he knows how to build the biggest pot possible. Who wins and loses a particular hand is NOT the whole story.

There's far, far more to poker than showing down your cards and seeing who has the best hand. And there's far, far more to online gaming than addiction and vice and criminals preying on our children. People play poker for many reasons. Because it's fun. Because they can make money at it. And, well, because it's THEIR time and it's THEIR money and they can spend both any way they damn well please.

Are there legitimate issues surrounding online gaming (underage gamblers, addiction, etc) that need to be addressed? Certainly--so let's address them. Prohibition is not a viable option. Passing a law without open debate is not how a democracy is supposed to work. As citizens, more so than as poker players, it's important that our lawmakers know that WE understand the issues, too. And that we expect our rights to be respected, and not stripped away in the guise of "what's best for us". WE should be the ones making those decisions.

UPDATE: As Mr. Nuts and Haley point out in the comments, a Federal Court ALREADY has ruled that poker is a game of skill. I'd forgotten about Baxter vs. the United States, wherein poker legend Billy Baxter convinced the court that his gambling winnings were due to skill, not luck, and should be taxed as "earned income". Baxter won, the ruling held up on appeal, and when the Feds decided not to take the case to the Supreme Court tried to get Baxter to make a deal. Which he refused to do. So, again, the point Senator Kyl raises to attack online gaming boomerangs on him.

posted by Gene @ 1:28 PM   |