Wednesday, July 12, 2006

House OKs Bill to Ban Internet Gambling

Congress voted 317-93 yesterday in favor of legislation that attempts to kill Internet gambling by cutting off the flow of money. The bill would prohibit banks and credit card companies from funneling money from American gamblers to Internet gambling sites. It also would allow law enforcement officials to work with Internet providers to block access to gambling Web sites.

Supporters of a ban say the Internet's widespread availability makes it too easy to gamble, creating betting addictions and financial problems. Critics of the ban believe that it would be wiser to regulate online gambling and collect taxes on the $12 billion industry.

Predictably, online gambling stocks didn't take the news well. Shares of PartyGaming (LSE:PRTY), which owns Party Poker, plummeted 24% on the London Stock Exchange.

Short-Sighted & Hypocritical

The bill would exempt state-run lotteries and horse racing. In other words, Congress believes there is "good gambling" vs "bad gambling". Lottery good, poker bad.

In reality, state-run lotteries have the lowest payout of any possible gambling propositions. Most only pay around 55 cents on the dollar. By comparison, online poker sites and casinos payout roughly 95 on the dollar! And they want to exempt the lottery?

Despite these terrible payouts, lotteries are by far the most popular form of gambling. Over 50 percent of adult Americans play legal lotteries in lottery states. Two-thirds of these play regularly, which means that about one-third of the adults are regular players. The poor, minority, undereducated, and middle-aged are all more likely to play.

And are current online gamblers going to stop cold turkey? Of course not. Their money will instead be shifted to brick & mortar casinos, horse tracks, lotteries and old-fashioned bookies. The gambling will continue, just not online. Maybe that's what Congress wants?

Clearly it is unfair to allow online lotteries and internet betting on horse racing to flourish while cracking down on other kinds of sports betting, casino games and card games.

Is It Time to Pick a New Hobby?

Not yet. The bill will likely never pass through the Senate. Not only is the Bill a low priority going into an election year, it's filled with smoke and mirrors. With most online gambling sites being offshore, legislation is nearly impossible. In addition, it will be nearly impossible for credit card companies to know whether or not a company is an online gambling site. Gambling web sites usually use other names to avoid detection during money transfers.

With the bill unlikely to continue its momentum, it may be a good time to pickup the online gambling stocks that saw their shares tumble yesterday for the short term (unless you’re an American citizen. We cannot own these shares since gambling is “illegal”).

2 Comments:

At 4:37 AM, Anonymous free poker online said...

I agree with the legislation which aims to ban credit cards as a payment method for online gambling of any sort... and i think it should be enforced worldwide – not just in America. In fact, gambling with a credit card should be banned full stop. Not just on the internet. It’s a no brainer when you consider you are placing backing the outcome of an uncertain event with somebody else’s money. Chance and credit do not mix well in my opinion, and continuing to allow it would only contribute further in negatively affecting the high levels of personal debt many citizens today find themselves in. I do however, think that the prohibition won't work; or at least it won’t be received well amongst gamblers - I mean what’s the point in banning a credit card payments made on an online poker game, for example, but not on other kinds of online sports betting? Slightly hypocritical no? I mean how can you allow someone to participate [with or without a credit card] in online horse racing betting, but not put any money on a hand of texas hold’em poker? both activities involve a large degree of chance, and neither are guaranteed to yield financial return.
What really infuriates me is that the minority of irresponsible gamblers [those paying with someone elses money!] have now ruined the fun of online betting for everyone else - those like me who pay with money they actually have in their bank!!
At least for the Americans there is always the free online poker games!

 
At 8:36 AM, Anonymous poker paul said...

I realy feel for the gamblers in the US. I cant beleive your Congress banned all banks and credit card companies from accepting transactions from online gambling

sites which makes you unable to play online poker. What a bunch of hypocrites your state government are. They

have the largest gambling operations with lotto, keno, etc. If they truly believed their rhetoric about internet gambling they would cut out the state operations

also. And now they are bringing in a law to legalise slot machines. Personally I would have a big grudge against any party that stopped me from playing on an

href="http://www.littlewoodspoker.com/index.htm">online poker site
. I think there must be some way for you guys to get around this problem. Must make you wonder

if you are living in the land of the free when it seems the government has full control on what it will and wont let you do.

 

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