Unlawful Internet Gambling Enforcement Act

The new internet gambling bill prohibits foreign gambling websites from accepting payments from U.S. residents. This means I can no longer play those little $2 and $5 online poker tournaments I like so much.

But I shouldn't worry about that because:
1) I can still go the track and bet my life savings on horse racing (or dog racing),
2) I can still go to the gas station and buy as many lottery tickets as my bank account can afford,
3) I can still play poker, but now I have to go to a licensed casino to do it, and
4) I can still fill out some paperwork and buy a shotgun (Ok, that’s not as directly related, but it always makes me laugh.) (The government is essentially saying, “We don’t think you’re responsible enough to control your online gambling, but we’ll go ahead and give you the benefit of the doubt when it comes to handling firearms.”)

Last year online gambling brought in ~$13 billion in revenue, and that's projected to jump to $25.2 billion in 2010. (source) I think this number would be much higher if sports books in the US were allowed to do business online. Even back when foreign online sports books could accept US deposits, a lot of my friends were afraid to open online accounts because they didn’t trust their money in the hands of a sports book operating from a small Caribbean Island. So instead, they went through a local bookie -- a bookie who would honor point-spreads published in the local paper, a bookie who wouldn’t check his customers’ credit, but a bookie who would make his own rules when it came to debt collection.

If US based websites were legal, our government could tax their income. And collection could be done using legal methods. And perhaps even some legitimate establishments would create some sort of credit check system that would allow them to calculate an individual's betting limit.

And it's difficult to make the argument that the government wants people to stop gambling. I think that people who want to gamble can gamble. But if studies show that legalizing internet gambling in the US will increase the number of gamblers, and therefore increase the number of people with gambling problems, then go ahead and make it illegal. I don’t necessarily agree, but I don't vehemently disagree either.

But here’s the part that really gets me:

Two and a half years ago I went to a casino in downtown Detroit. In case you’ve never been to downtown Detroit: it is poor. Extremely poor. (And you see about as many white people in downtown Detroit as you see black people at an Ivy League swim meet.) My girlfriend’s dad works at the casino, so we went there to say hi and walk around. (and maybe I’d throw a few bucks down on the tables for laughs.)

I was definitely surprised to see such a grand casino in such a low income neighborhood. And I was even more surprised to see so many people gambling so early on a Saturday afternoon.

I knew the standard blackjack betting strategy, and I had big regular paychecks coming in, so I walked over to the blackjack tables and I couldn’t believe what I saw.

$15 minimum bet!

Even when I played blackjack at the Bellagio I was sitting at $10 tables, yet there I was, in arguably the poorest American city I’d ever seen, in a casino packed with its residents, and the cheapest table in the house had a $15 minimum bet!! I was stupefied. I sat down for a minute (one actual minute), played four hands, and lost $60. (my losing doesn’t influence my opinion on gambling, I just thought it was funny that I lost so fast that day)

Before the Unlawful Internet Gambling Enforcement Act, a person who wanted to play blackjack could turn on his computer and play $1 hands online. Now, if a Detroit resident wants to play blackjack, Federal law prohibits him from playing online. But, if he wants to walk over to the local casino and play $15 minimum hands, the Federal Government is surprisingly tolerant.