USA Gambling Prohibition

Americans love to gamble…

…it’s something that is ingrained in the pioneer spirit: do we take the southern route and risk fighting the Comanches, or take the northern route and perhaps freeze to death? Do we buy stocks during a crash, or do we sell? Do we speed on the highway because every one else is doing it? Do we take the blue pill, or the red pill?

There is Las Vegas; there is Atlantic City. There are the multitudes of tribal casinos – there are the poker cardrooms. And then of course we have the lotteries, the horse and dog tracks, and let’s not forget Bingo.

As Americans, most of learned to gamble as kids. Blackjack was played wagering match sticks – poker with nickels and dimes. In fact, According to Hoyle – The Official Rule Book on Card Games – Blackjack and Poker are listed as “Fun and Family” games. So why can’t we play these games online?

During the 1990’s booming years of the Internet, online casinos flourished taking bets from whomever, wherever. It was a self-regulated market that relied on small jurisdictions that had the infrastructure that provided servers and a gaming licence: Kahnawake Gaming Commission, Antigua – Directorate of Offshore Gaming., and a number of banana republics got into the action as well.

In the early 2000’s, Europe saw that there was a need for European licensing compliance so the Isle of Man, Alderney, Gibraltar, and Malta became popular spots which hosted servers, and provided support and offices for online gambling entities. During this time, there was some sword rattling by the DOJ claiming that online casinos were violating the Federal Wire Act. This was stretching it a bit since the Wire Act (passed in 1961), prohibited the use of phones to place sports bets. The DOJ’s logic of the 21st Century was that people were using their phone lines to access the Internet – and that they were placing wagers via these lines – thus breaking the law.

It was in 2006 that the Unlawful Internet Gambling Enforcement Act (UIGEA – pronounced Ouija – y’know, like the Ouija Board) was passed. This was a one of the most truest forms of back door politics – it was underhanded and anti-American. It was self-serving politics at its worse. This bill was tacked onto the to the SAFE Port Act as Title VIII. The SAFE Port Act was a counter terrorism bill to ensure that US ports remained safe. So what politician in his or her right mind would vote against it? It was potential political suicide for those who opposed it. According to that did. It was passed right before midnight the day before Congress was to take their fall break. Many of the politicians who signed the bill didn’t even read it.

The bill was cunningly written – it criminalized the payment processing of gambling funds – expecting the banks to police this. It also had cut-outs for parimutuel betting – allowing bets on animals racing around in circles. Strangely enough, it legalized intrastate gambling – as long as it was so long as it is legal under state law and kept 100% in-state.

The bill did not target private citizens – Joe Gambler – but the DOJ continued to state that gambling online was illegal.

The Party’s Over

The UIGEA was purposely vague in the apparent hope that these foreign <gasp> casinos would choose to error on the side of caution, and bail out of the US market. They were right – it worked. Many stopped taking US bets. The DOJ went after a few high profile individuals arresting them in airport lounges, and a few of these individuals either went to jail or were faced with incredible fines.

And then it got worse.

April, 15 2011 is known to US gamblers as “Black Friday” – the day that the law kicked in and the DOJ confiscated the domain names of some of the most popular poker sites: PokerStars, Full Tilt, Ultimate Bet, and Absolute Poker. The owners were indicted – players funds were ceased totalling hundreds of millions of dollars. Players were screwed, thousands of employees were left without livelihoods – and for what? Europe looked on in bewilderment. Here is the US – the mecca of gambling – and yet it’s being forcibly banned. How is this not sanctimonious and hypocritical?

While politicians in the States were bickering about the morals of gambling and ignoring the will of their constituents (a number of polls conducted during this time showed about 80% of adults were pro-online gambling), Europe marched on.

But most everyone to read the writing on the wall. The US was wiping the playing field clean riding itself from those pesky “offshore” casinos.

Proper Regulation Is Here

Online gambling in Europe is properly regulated. Some jurisdictions are better than others, but for each there are player safety nets: enforcement of player exclusion policies, strict player identification processes, oversight of casino operations. Sure there are complaints along the way – it’s not a perfect system, but it’s pretty darn good. The only players who really have any issues are advantage players. There has always been a tumultuous affair between casino operators and the “bonus beaters.”

And at this moment in time, we are seeing the US market begin to open up. I remember several years ago at the GiGSE, the venerable Professor I. Nelson Rose gave a presentation which outlined the different types of prohibition in the States. I explained this here:

Presently, nearly every state has some form of regulated gambling, so it’s really difficult for a state to claim that it has a public policy against gambling when it’s the state itself that’s running the gambling, and it’s often required by law to actively promote it.

He also covered the general attitudes concerning gambling. A couple of hundred years ago, gambling was considered (by most) a sin, it was totally outlawed and if you were a compulsive gambler, you were going to hell. Attitudes changed and then it was considered a vice. As a vice, gambling could be set up in deserts, on islands, or riverboats surrounded by holy water. If you were a compulsive gambler, it was your own damn fault. Then the general attitude changed – gambling is now a form of entertainment, and the entertainment factor is what is promoted. Now, if you are a compulsive gambler, it’s treated like a disease, and you don’t fault someone for being ill. These attitudes have produced the laws that US citizens must deal with. It was really a very interesting presentation.

Please read the entire GiGSE 2007 report at your leisure. It’s important to understand where we’ve been, and where this industry is going.

Fast forward to today. Regulation in the States is a real thing. It may be limited, but it’s the real deal. Unfortunately, old cronies like Sheldon Adelson just make you want to rip your hair out. He’s the chairman and CEO of the Las Vegas Sands Corporation, which owns the Marina Bay Sands in Singapore and is the parent company of Venetian Macao Limited which operates The Venetian Resort Hotel Casino and the Sands Expo and Convention Center. He’s worth about $28 billion, and is listed by Forbes as the 18th richest person in the world.

He was awarded “Fourth Point of Contact” Award for 2014 for having his head so implanted where the sun don’t shine, his adam apple is actually his nose.

…he is adamant on stamping out online gambling in the US saying that “it’s a trainwreck – it’s a cancer waiting to happen.” Adelson has stated publicly that he is “against very wealthy people attempting to or influencing elections. But as long as it’s doable I’m going to do it…” Simply, he is going to do whatever it takes to make online gambling illegal in the States. Why? Well he fears college students getting drunk and losing all of their funds to an online casino – or that they will become addicted to online gambling, and lose control.

For him to take the moral ground is ludicrous – his casinos serve free drinks, and you don’t have to show ID to pump $100s into a slot machine – you only need to show this when you win a jackpot – and that’s for tax purposes. So how are college students being protected there? And what about single moms, or grannies at the slots? His opinions are weak and tepid. And sometimes one should just keep opinions to himself – in other words, shut yer pie hole. What is a fact is that gamblers want regulated online gambling. He may own a few big casinos, but the casino business is not his alone – it belongs to the punter.

So it’s not a 100% reality yet. In the many years that I have been in the business, it’s always bad news when too many people are trying to get a piece of the pie. The USA is a prime example of “everybody for themselves”. It’s the player who just wants to play at home who loses out.