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Internet Gambling Law Resurfaces
hayek writes "The on again off again Internet gambling prohibition act is apparently on again [story from CNN]. The bill, which passed the house, apparently stops credit card companies from completing transactions with offshore casinos. Of course, since these debts are apparently unenforceable anyway, its unclear what the point of the law would be, other than to make clear that lowly college students wanting to gamble over the internet will need to find legal alternatives that are well regulated by U.S. authorities and safer."
It's not a moral objection to gambling (most of the states either have legalized casinos, legalized dog/horse racing, or state lotteries).
In the case of casinos and dog tracks, very few of those exist. In most cases, there are a fixed number of licenses, and the only way to start a new casino is to buy an existing one and demolish it.
In the case of state lotteries, they are quite obviously the worst method of gambling (from the perspective of how likely you are to come out with more money than you put in). In most states, a sales tax is charged on the ticket. Further, a portion of the remaining bet is deducted for "administrative expenses". And then 50% of the remainder is placed into the prize pool. If the odds of winning the lottery are 1 in 10, a winning $1 bet will pay about $4 (including the $1 bet being returned). This means that you have to be 2.5 times luckier than dumb luck to break even. That's an insane house advantage.
Contrast this with casino games, where the house advantage is significantly smaller, on the order of 5-10%. In sports betting (assuming standard Vegas payout rates, which you should be able to get from whatever bookie you choose; if the book don't offer Vegas payouts, take your money elsewhere), the vig is 4.5% (1/22), meaning that only being slightly better than randomly making bets will break even.
Basically, the only reason that sports betting is illegal in most states is because it would drive state lotteries out of business.
It's unfortunate. If this bill had been justified as a consumer protetction law to protect people from offshore casinos that don't pay out even though they collect then he may have had a point, but justifying this law with a claim that something doesn't serve a legitimate purpose in our society, he's lost the argument. (Well, IMHO. There are people in congress that matter infinately more than me because they get to vote on this thing, and they may be just as brain dead.)
What else doesn't serve a legitimate purpose in our society? Homeless people? We don't need them, they have no purpose. I guess he thinks we should deport them. Other forms of entertainment (Obviously purposeless, since casinos are entertainment, and they have no purpose)? Music, Movies, Playing cards? Well, I guess we don't need DRM laws or extended copyright, because entertainment is illegitimate, and only entertainment companies are pushing for these things.
Ah, the hypocrisy.
"...make clear that lowly college students wanting to gamble over the internet will need to find legal alternatives that are well regulated by U.S. authorities and safer."
You forgot to add "Taxable" to the list