[Vegas on My Mind]

Half-truths and absurdities litter the debate over Internet gambling

Click and ka-ching: Is gaming really the Internet’s “killer application”?
Julie Jacobson/AP

In last month’s Congressional hearing on a proposed ban on Internet gaming, anti-gambling absolutist Les Bernal tried to pull a fast one on Louisiana Rep. Cedric Richmond. In the Democrat’s remarks, he mentioned the revenue the Bayou State gets from online lottery ticket sales and how much worse its $1.6 billion budget deficit would be without it.

“Part of the reason you have a budget deficit in Louisiana is because things like the lottery were supposed to fill your budget gaps,” said Bernal, executive director of Stop Predatory Gambling. To which Richmond shot back, “No, actually, my Republican governor did a billion dollars in tax breaks with no new revenue, so.” The room erupted in giggles, so silly was Bernal’s failed cheap shot.

If only this had happened sooner. If only another member of the House Subcommittee on Crime, Terrorism, Homeland Security and Investigations had been quick-witted enough to call out the string of half-truths and absurdities tossed out by those determined to tell the nation where and whether to gamble. To sum up the “expert” testimony of March 25, Internet gambling is responsible for funding ISIS, money-laundering and official corruption. Pick any societal ill—poverty, child slavery, Kanye West—and it was probably mentioned. Also, it’ll bring on the next economic catastrophe because, University of Illinois business professor emeritus John Kindt claimed, “Killing personal, business and institutional finances, Internet gambling is widely known as the ‘killer application’ of the Internet.”

Two things: Nobody ever says “killer application.” And nobody regards gambling as a killer app because a genre of online activity does not a killer app make. But Kindt wasn’t done. He also tied the 2008 economic collapse to, it seems, the ability to play $10/$20 No-Limit online. I’ve rewatched this bit about a thousand times, and it still makes no sense: “Wall Street is dangerously flirting again with trillions in unregulated derivatives. That is, financial side bets. In this context, vacuous Internet gambling financials predicated on gambling activities are in development, and Internet gambling stocks would tantalize a series of speculative bubbles which can only lead to another Great Recession or worse.” No member of Congress questioned Kindt’s wild claims.

Equally bizarre were insistences by the sponsor of the Restoration of America’s Wire Act, Utah Rep. Jason Chaffetz, that it is impossible to ensure that people are in the states they say they’re in when they wager online. The Republican asked: “Does anybody really believe that technology can prohibit a 16-year-old from getting on a [Virtual Private Network] and really prohibit gaming in the state of Utah?”

With this, the only sane person on the panel, attorney Parry Aftab, piped up and said, “I do.” Aftab is executive director of WiredSafety, a group focused on protecting vulnerable people online. She’s not some emissary of Vegas. She’d asked regulators in Nevada, Delaware and New Jersey, where online gambling is legal, and learned they do “prohibit any VPN. This technology is getting a lot better. What we will have is better than what we have now, which is nothing to stop them from gambling off of a Caribbean site from the U.S. in Utah and anywhere else.”

She should’ve also informed Chaffetz that the bill’s primary supporter and his new BFF, Las Vegas Sands Chairman Sheldon Adelson, relies on geo-locating technology to ensure the mobile gaming devices offered at Venetian and Palazzo aren’t used outside the hotel or even in certain private corners onsite. That’s harder to do than detecting if someone is in St. George rather than Mesquite.

Still, Aftab did something valuable in asserting that private stakeholders could help police Internet gambling. “If we can have licensed providers, they will help police it because they’ve paid a lot of money for the ability to do so within the state,” she said, later pointing out, “If you outlaw the legal means of [online betting], the only means out there are the criminal sites.”

Maybe there are good arguments or data to support banning online gambling and giving foreign hucksters the field to prey on Americans. But none was cited at the hearing. Nobody asked Bernal or Kindt to join us in the real world, where gambling exists because it’s fun for some people and a compulsion to others, the same as alcohol, fast cars or Netflix. Nobody said, “Dude, you’ve already said it can’t be contained, so how in that reality would you suggest protecting people?”

Folks like Chaffetz might not like gambling, but in selecting the panelists and asking the questions at this hearing, they showed that they totally dig the Vegas business model. Like they say, the deck is always stacked in favor of the House.

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