Analysis: Ban is more politics than poker

Liz Benston

Sunday, Oct. 8, 2006 | 7:41 a.m.

The Senate bill approved in Congress last weekend restricting Internet gambling had some local poker players cashing out their online accounts, calling their attorneys and blabbing less about their online play.

In Las Vegas, home to poker pros and businesses that cater to the offshore operators of Web casinos, players had grown complacent with their view that poker is a game of skill that isn't subject to U.S. gambling laws that address games of luck. Others say online poker is legal - or that if it isn't explicitly legal, it's not made illegal under the federal Wire Act, which was a law designed to outlaw Mafia-run sports betting telephone operations that predate the Internet.

Both the complacency and the overreaction that followed have been off the mark.

For Internet poker to truly become legit in the United States and evolve from an offshore enterprise to a business that U.S. gaming companies can participate in, casinos need to mount a legal challenge to the Wire Act or pass legislation in Congress to legalize Internet gambling. The odds are better on the former, though some shift in power away from religious conservatives who have dominated the Internet gambling debate could help legislative efforts.

The bill, like the Wire Act, doesn't criminalize players for gambling online. It applies criminal and civil penalties to institutions such as banks, credit card companies and online cash deposit services that process the bets. It also allows state and federal regulators to shut down Web casinos and halt methods of linking to those sites, including Internet ads and portals.

It's uncertain how actively regulators will pursue such efforts or whether foreign companies will bow to U.S. law enforcement.

The risk for bettors is that their favorite gambling site and payment processor might get spooked by the rules and block access. While there are repercussions for publicly traded companies abroad that don't return players' money, smaller, little-regulated sites could theoretically take the money and run.

Players can rest easy with the feds. The FBI has not shown any desire to arrest gamblers in their homes, nor would the Justice Department have the time or resources to pursue that course of action. The same holds true in Nevada, one of few states that prohibit players and operators from engaging in online gambling. State regulators haven't licensed Internet operators so as not to run afoul of the feds. Busting people who gamble on offshore sites, they say, is outside the state's jurisdiction and a federal concern.

Even in Washington state, which recently passed a law making it a felony for people to gamble online, regulators intend to use the rule to shut down gambling sites and related businesses rather than throw gamblers in jail.

Another convoluted chapter in this country's schizophrenic and hypocritical approach to gambling, this Senate bill is but a dubious attempt to further criminalize an activity that the government already considered illegal.

Internet gambling expert and Whittier Law School professor I. Nelson Rose is more blunt.

"This is petty stuff," he says. "It's just one more crime" for companies that can be prosecuted multiple ways, including federal racketeering laws that involve tougher penalties.

Like many observers, Rose calls the bill a well-timed political maneuver.

"I don't think (Senate Majority Leader) Bill Frist cares at all about Internet gambling, but he rammed (the bill) through at the last minute. That's reprehensible, especially for 'Mr. Values.' One of the values of democracy is that people know what they are voting on."