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Betting Against Online Gambling
conq writes "BusinessWeek.com has an article looking at the possible consequences if anti-gambling legislation is passed. From the article: 'Just how much of a setback is the proposed legislation for the $12 billion industry? While online gambling companies generate half their sales from U.S. gamblers, the industry is operated almost completely by companies beyond the reach of U.S. regulators. [...] It's a lot of smoke and mirrors and misstatements.'"
...that there's nothing else important going on the country or the world, so Congress can address the dire scourge of online gambling.
"A great democracy must be progressive or it will soon cease to be a great democracy." --Theodore Roosevelt
So, will this outlaw all those internet ads where I can win something by spanking the Monkey? Or was that punching the Monkey? Maybe that's why I never win..
So the gambling sites will move offshore. The banks and credit card companies will not want to lose that massive
source of transactions, and will find a way to continue those transactions. There is no explicit restriction on them.
There's too much money at stake here.
...I'm glad I've managed to stay away from gambling online. If I had ever gotten into it, I probably wouldn't have this PC and net access to comment on this article. The two states I've lived in my whole life, Oregon and Nevada, are #2 and #1 in gambling addiction per capita (too lazy to provide links, but google it if you'd like) respectively. I've seen many friends who have wrecked their lives with gambling, and have come damn close to wrecking my own.
I'm sure this bill will be denounced on slashdot, but I really don't think of it as *that* evil. Sure, there are plenty of legitimate online gambling sites, but many of them are there solely to rip you off of your hard earned dollars, and often times people (unfortunately) cannot tell the difference. Maybe, just maybe, our elected legislators have our best interest in heart this time.
I mean in this day, is anyone really more than a few hours away from an Indian casino? Do you really need 24/7 access to gambling? It might be that the very few hours of distance is all that saves a lot of people from their self...
See also: Prohibition.
The way I see it, the congress is worried about the billions of Dollars that's sipping out of the country. Online gambling will always be there, so if we don't want all the money to end up in hands of tropical islands, why not just vote for legalizing this industry instead?
I doubt the republicans are doing this to "save us" from the evilness of gambling. After all, the vast majority of all Americans gamble responsively. Blaming the industry too much would be like blaming television for murderers becoming who they are (read: artificial violence). If people have a problem with spending money, it will end up in pockets of other people no matter what, simply because gambling is only one way to canal it.
So once again, my point is, the US authorities should look at options of keeping as much of the industry within the US as possible instead of messing with peoples' habits and hobbies.
Full Tilt
Jon Stewart on net neutrality and online gambling.
They want to put more and more Casinos in suburban areas and in the city of Philadelphia if I recall correctly (all this pushed by the former mayor of Philly Ed Rendell, a democrat, I believe). They talk about all these wonderful things it will bring it like jobs and more revenue. What the politicians don't mention loudly is that they are also proposing giving the casinos a big break on property taxes, that casinos have to make money to pay revenue (hint: it doesn't come from the good of their heart), and the crime rate going up. It's not like they're planning to put up a technology center or something positive.
But this bill isn't about protecting people, it's about protecting revenue. Afterall, if you can sit in the comfort of your own home wasting your money on gambling, why go out and do state-sanctioned gambling (lottery tickets and casinos). What you can't tax, you ban.
BTW, for gambling proponents endorsing building Casinos as a public good, just go to Atlantic City (hey, if you are a Senior Citizen, just take the bus for minimum cash, like $10, and they give you that and a little more back in slotmachine tokens - hell, you can probably cash your social security checks there too), and look at the streets directly behind the casinos. One street behind the Boardwalk, it becomes a total dump. All show, no substance.
All of the major card networks (VISA, Mastercard, AMEX, etc.) in every region now have a strict policy that online gaming sites require a valid gaming/casino licence from the jurisdiction they are based in, and must specify the gaming merchant category code 7995 in every authorization request. Merchant banks that do not enforce this rule with their gaming merchants risk losing their card membership. No bank wants to loss its VISA or Mastercard membership. Card networks are also banning the use of quasi-cash merchants from being used to hide gaming transactions.
If the US wants to stop its population from using online gaming sites, all that they have to do is dictate that the issuing banks in their country simply decline all authorization attempts which contain the 7995 category code. The US banks can also look at the merchant country codes, so that it can allow US based gaming sites like horse betting (which is legal in American but illegal in many countries) to be authorized, while still declining the overseas gaming sites.
Problem solved, since the vast majority of people using any type of Internet commerce, including online gaming, pay directly or indirectly with their credit cards.
I am sick and tired of politicians in one country expecting to regulate Internet activity of other countries, using broad extra-territorial legislation. This is impossible for online merchants and banks to enforce, especially since many countries have laws that contradict each other. Should we ban online sales of electronics globally, because they are illegal in North Korea? What about alcohol that is illegal in some Islamic countries? What about mediciations, mod chip, etc.? Even non-physical online software and services, including proxy agents, news & political websites, adult entertainment, etc. are banned in many countries.
While the government is good at stopping large financial transfers, it's lousy at stopping small ones. So if they really want to crack down on gambling, they'll have to go directly after the ads too.
...
But if you can't run gambling ads, I think a lot of current and potential future sports information sites will be in trouble. There are only so many retro jerseys their advertisers can sell
Odd though it may sound, the big losers from a real crackdown on internet gambling might be fantasy sports players.
And nobody's explained to me why internet gambling is worse than lottery tickets, which are just another tax on the poor and uneducated, and are actually promoted by government-funded advertising.
To err is human. To forgive is good system design.
I'll offer 2 to 1 that by this time next year, this industry will be even larger than the 12 billion it is now. Takers?
Whenever governments try to block capital flows from consumers to producers, money finds a way. Albeit, with some friction, but it gets there in the end.
This reminds me of the invention of Swaps; a financial instrument originally devised by banks as a means to provide a service helping multinationals circumvent capital controls imposed by the British Government (warning: PDF).
I can see the formation of off shore entities that will sell a "service" to US consumers. Whatever the the facade (e.g., email, picture viewing, etc) of this service, the real purpose will be to enable US based consumers of online gambling to move offshore; by paying for the "service" the cash is then off governments radar.
Visit your favourite on-line gambling site and the funds you used to purchase the "service" are now magically available, minus some "friction", of course, to fund your gambling. Later another "service" would be used to repatriate funds back into the US.
There are loads of other mechanisms I can think of to get around this stupid law. Of course the government will find it necessary to establish policing actions to find / stop this avoidance, thus screwing the taxpayer a second time ("No, you CANT gamble online AND you have to pay me to make sure you DONT gamble online)".
Another reason I'm glad I don't live and pay taxes there anymore.
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Folks, one hell of a lot of people like playing poker and gambling on the internet. Unfortunately, the rake from those games is ALL going offshore. Take note that this bill made it through the house but is not going to be matched in the senate.
This is just a warm-up. Legalizing online gambling so the feds and US corps can get their cut is the real goal. Ask yourself: why aren't the major US gaming corporations being extremely vocal on this issue?
Once again, The Right brings up an issue to legislate on moral grounds (gaining votes) only to collect behind the scenes (gaining $$$) when they later fulfill the interests of the corporations.
"This wound is beyond my ability to heal. We need Elvis medicine!"
So all the online gamblers switch to day trading , which is entirely legal, with the inevitable result of a total f**k up of the US sharemarket.
As soon as a gambler's money ceases to be an expense (like movies or gaming software), and he begins to hope or depend on a lucky streak to solve his financial problems, the gambling becomes an evil addiction. Mathematical ability is not the issue, gambling addiction is irrational. It is a spiritual problem that puts hope of financial salvation in an eventual win.
Sometimes people with excellent math ability can win consistently at games like BlackJack. In my opinion, this is wrong also. An honest casino is a form of entertainment. They would be up front about the house percentage built in to all the games. The card counter again turns gambling into an income rather than an expense. Often successfully, to be sure, but it is like a quick change artist robbing a movie theatre.
In real life, of course, most Casinos seek to exploit gambling addiction for profit, rather like Tobacco companies exploiting nicotine addiction. Casinos with such sleazy motives in turn create a sleazy atmosphere around the Casino. The campaigns to ban gambling have the same motivation as the campaigns to ban smoking.
There have been some attempts to create wholesome Casinos. The main idea is that you buy tokens which cannot be redeemed for cash (same idea as pinball machines), so there is no temptation to look to the games as income. Such a Casino would probably qualify as "not gambling" under anti-gambling laws. Of course, playing this form of "gambling" is like smoking nicotine-free tobacco.
"...execute on the US judgment in the foreign country..."
But there are countries that won't honour US judgements and in fact even won't extradite criminals!
Cuba and The Dominican Republic are but two that come immediately to mind. I'd be surprised if Russia or Venezuela would rush to honor any US civil judgement, and Middle Eastern countries? Not a chance.
And as laws change these companies will move about, away from more restrictive regulatory enviromments to domains where enforcement is lax. You see this type of activity all the time with Hedge Funds (a biz that I've got some experience in); many funds, previously based in the Cayman Islands, are now moving further afield, in the South Pacific simply because many of the Carribbean regimes now will honour US Judgements.
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I applaud our government for getting tough on these criminal activites.
I know that some of you may think that it is your right to do what you wish with your money. But should we really have rights that could be harmful to some who excercise them? Hopefully this is only the first of recent steps that will lead to the elimination of wasteful and dangerous pass times from this nation.
Understandably, some would argue that there are many more things in this country that are dangerous. And I agree, these in time should be eliminated too.
Ciggarette companies sell heavily taxed items that WILL kill everyone who uses them, given enough time. Drug companies advertise all of there newest concotions on the easily scared. Pornography focuses on the sick and dark nature of humans, while exposing children to the danger of sex. Condom companies sell a product which makes sex with multiple partners seem reasonable and appealing to those who would otherwise, most likely, be spending their time doing things that will help the nation. Sex should be eliminated almost entirely, I have abstained, why can't everyone else? Car companies have ruined the atmosphere. Motorcycles are just crazy. Can you believe that we even let big strong dogs in our houses, without leashes?! How many lives have been claimed by dogs? More than zero, and anything more than zero cannot be tolerated.
Still, there are those that don't see the harm in online gambling. Most people have never tried it. But they will. What is stopping these online gambling sites from coming into your home, and forcibly taking all of your money? Is it a danger that we can really ignore?
Right now there are thousands of online poker professionals who make a living, often a very financially substantial living, playing poker from the comfort of their own home. They should be stopped imediately, so that they can stop making a lot of money for themselves, and start making far less money from the companies in America that have been set up to help America. Americans owe it to the rest of us to stop their search for alternative ways of living and conform to what the reasonable few in Washington have decided is good. Who could disagree with that? Who could disagree with a country by Americans, for Americans?
I believe that someday, we, as people, will come together and weed out everything that is bad and harmful so that we can all live lives filled with the pleasure of knowing that nothing bad will ever happen. Except old age.
You take it, I don't want it...
In terms of online gaming, the U.S. has tried to do what you mentioned, and is usually told in more legalistic terms to fuck off. In the same way the U.S. wouldn't extradite Yahoo employees or hand over Yahoo's U.S. assets to China if Yahoo happened to violate Chinese censorship laws, in countries where online casinos are perfectly legal, there is no way they are going to shut down that revenue source.
You might have taken legal action against a foriegn company for something that was illegal in both countries, but short of the U.S. threatening assasination/economic sanctions/military invasion or various other sorts of brute intimidation, no soveriegn country is going to destroy a perfectly legal industry just because the U.S. asks nicely.
Obviously, the only thing to do is to somehow catch it when American-based credit card companies are exchanging funds between an American and an online gambling company.
But how do you tell if the company is an online gambling company or not?
Well, the credit card companies might know, but if a company is overseas it's entirely possible that the CC company might not know all the details of the business. It may be listed with the CC company as a business that does something else entirely, and not even necessarily be lying about it (since the last time I checked, CC companies only want to know what is a merchant's _primary_ business, not all of the details behind every single transaction they ever do).
So... how do you tell if any particular CC transaction is connected to online gambling or not?
Ultimately, you can't. So the only thing left to do at this point is to impose fines on any and all credit card transactions with businesses other countries, regardless of what business they are actually in.
I don't use online gambling sites myself, but I am _SO_ curious to see how this whole thing plays out.... (like a traffic accident, you can't look away, even when you want to).
File under 'M' for 'Manic ranting'