Online Gambling: Will New Law Be Repealed - Don't Bet On It

Last week, Arizona authorities raided four illegal online gambling rings, centered in Phoenix but operating in three states, seizing millions of dollars in cash, cars, and property.  Maricopa County Sheriff Joe Arpaio said millions of dollars were being collected, and often extorted, from gamblers visiting online sites based overseas.  This recent crackdown highlights one of the major problems our state and local authorities face: enforcing existing state laws prohibiting gambling over the Internet. 

Online Gambling: Will New Law Be Repealed - Don't Bet On It

Until recently, authorities were forced to search for other violations – in this particular case, money laundering and extortion – to go after criminals trying to evade our laws prohibiting gambling over the Internet.  Last October, the President signed into law the Unlawful Internet Gambling Enforcement Act (UIGEA), culminating a 10-year effort by Congress to provide law enforcement with the means to stop offshore gambling businesses from circumventing our existing federal and state gambling laws.  The Justice Department is now working to draft regulations to implement this new law.

The bill did not, as some have alleged, make online gambling illegal.  Online gambling is already illegal under existing federal and state laws.  The UIGEA simply provides the legal mechanisms necessary for authorities to enforce those laws. Principally, the UIGEA requires financial systems to block fund transfers associated with illegal Internet gambling, which is the most effective way to curb illegal activities of offshore websites beyond the reach of traditional law enforcement.

One of the fastest-growing forms of online gambling is poker.  Many of the largest online poker gambling sites withdrew from the U.S. market immediately after the law was enacted.

But some online poker operators are lobbying Congress to exempt online poker from the UIGEA.  They allege it deserves an exemption because poker is “a game of skill” and an “American tradition.”  There are several reasons why Congress should reject this claim.  Exempting online poker would undermine state gambling laws, making it much more difficult, if not impossible, for states to enforce their laws against gambling on online poker, and would override any policy decisions made by state legislatures.

It is important to note that the UIGEA does not affect online poker for entertainment.  If a poker player does not bet with a gambling entity or stake anything of value on the game, it does not constitute “gambling” and does not violate the law.  Your Saturday night poker game is not affected.  Nor are “dot-net” and other poker sites that are free to play.  Poker enthusiasts are not deprived of the opportunity to play the game – only online financial gambling is affected.

Online poker is currently the most addictive form of gambling activity among American youth.  The National Annenberg Risk Survey of Youth (ages 14 to 22) over the last few years has identified rising trends in poker and Internet gambling as significant and worrisome.  The research finds that online poker players are more likely to exhibit problem gambling symptoms than other types of gamblers and over half of young people who gamble on the Internet weekly display signs of problem gambling.  Exempting online poker would, thus, exacerbate the two most pernicious aspects of Internet gambling: addictiveness and easy access for youth.

And finally, if poker gambling enthusiasts truly believe it is a “game of skill,” they can gain an “exemption” by proving that to a court.  Under most definitions of “gambling” in state laws, games of skill are not “gambling” even if there is an entry fee and a prize to be won.  While poker, like other card games, involves an element of skill, the hands that win or lose are a result of chance – “the luck of the draw.”  If enthusiasts could prove otherwise to the satisfaction of a court, then they would not be subject to online gambling restrictions.