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The Safe and Secure Internet Gambling Initiative - Too True To Be Good?...By Nelson Lardner

Last week, a couple of bill introductions in the House have fanned the flames of passion from many who have found online gambling the niftiest thing introduced to the public in the past decade (aside from, perhaps, the iPod).

Each piece of potential legislation related to the deep-seated vein of anger and resentment (which began throbbing big-time when last fall's outrageous Unlawful Internet Gambling Enforcement Act was passed under cover of darkness in a manner which would have made a dictator proud). Enduring pain was felt by millions of online gamers who didn't like the idea of a favorite new toy being taken away by politicians (a) bankrolled by protectionist interests, and/or (b) pandering to know-nothing hosanna-howlers who were more interested in imposing their standards of morality on others, rather than minding their own simple business.

The Internet Gambling Regulation and Tax Enforcement Act (H. R. 2607) has generated the bulk of the buzz. It delineates a level of taxation which could well prove palatable to everyone involved. As originally conceived, a license fee of 2% of all patron deposits into relevant betting accounts would be paid by individual operators, and channeled into the Treasury's general fund, leaving each customer's deposit intact until put into action.

With Washington democratic Rep. Jim McDermott the primary sponsor, the bill was conceived as a revenue-generating companion for Rep. Barney Frank's Internet Gambling Regulation and Enforcement Act (H. R. 2046), introduced in late April.

Just how much tax revenue McDermott's proposed legislation would generate is subject to speculation. The Safe and Secure Gambling Initiative (, a pro-online-gaming lobbying entity fronted by the British-based online payment processor UC Group, and Baker Tilly, a prominent international accounting firm, projects resulting tax revenue levels ranging from $6 billion to $25 billion in the first five years following an enactment. Everybody's entitled to a guess, and that's theirs, but the indicated range clearly indicates that we're not dealing with an exact science.

Tax revenues would be generated solely by poker and casino-game players since the Frank bill's wording, as currently constituted, virtually guarantees that internet sports betting would not be included under the prevailing equation. Frank's bill essentially requires that individual sports leagues grant their blessing to internet books to use their performance products as vehicles for speculation - a highly unlikely scenario, given current league postures. Shortsighted and unrealistic? Well, yeah . . . as such blockage cedes the bulk of the domestic sports market to illegals.

Suspect it's going to be hard to make sustained legislative headway in this niche, so long as we remain bogged down in what is essentially legislating winners (currently, the horseracing industry, with poker and casino games coming up fast, on the outside) and losers (sportsbook operators). It would be best to establish and support a tent under which all of gaming's customer bases can fairly function.

The prohibition pleaders, and their social-nanny-state harum-scarum tactics grow increasingly tiresome. They refuse to acknowledge that other peoples' choice to gamble is their own . . . and continue to act as if they have the right to make lifestyle choices for adult citizens for whom they're not responsible. It's a constitutional issue. It's a freedom issue, and the painful lessons earlier generations absorbed from the enactment of the Eighteenth Amendment (Prohibition) are utterly lost on them.

The sheer mass of court cases generated by Prohibition resulted in widespread plea-bargaining and its inevitable handmaiden, the uneven meting-out of justice. Broad contempt for an enacted law of the land is unhealthy, and Prohibition was no exception.

Like last fall's UIGEA, which remains vague, sloppily-written, and wholly un-American, the Eighteenth Amendment harbored the seeds of its own demise. Prohibition specifically forbade the manufacture, transportation and sale of alcohol. It did NOT prohibit possession, thus leaving those burdened with the enforcement task struggling to function on the slippery slope, especially given the limited funds allocated for enforcement. It's become apparent that hardnosed application of the UIGEA would prove to be a thankless and expensive enterprise - not to mention a harsh blow to long-cherished American civil liberties.

Can we get real, here? Were we talking about tobacco or liquor use, today, in this context, the laughter would be hysterical. And rightly so. We're talking about the freedom to enjoy adult pleasures in responsible fashion, without the modern-day version of the Snoop Sisters (Focus on the Family), who made utter spectacles of themselves again last month as they lobbied for their followers to report online-gambling sites to the DOJ, and actively supporting sustained Federal involvement in the blocking of online Internet-gaming-site funding, with the banking industry left largely responsible for such activity - on private banking's dime.

Focus on the Family and their ilk are oblivious to the reality that the UIGEA was virtually the final, pandering spasm of what has been abundantly-demonstrated to be what was a GOP congress out to cash in on every last earmark, and every possible pork-barrel project, while the relative value of the United States dollar has gone swirling down the toilet, "powered" by a torrent of printing-press spending that might have embarrassed Lyndon Johnson. Many of the culprits have been tossed out on their respective ears, and the broad citizenry can applaud themselves for that. Said citizenry can sustain by supporting Rep. Shelley Berkley's Internet Gambling Study Act, which can keep the conversation going while we maintain hope that all forms of online gaming will find themselves room in the tent. Can we please take another step forward, and not regress into the morass of nanny-state restrictiveness and repression?

Nelson Lardner

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