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April 23, 2014

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Online gambling is a matter of choice

Charge up your iPhone, because online gambling is here.

Nevada and Delaware legalized in-state online gambling this year.

Laws in these two states start to bring into the open what has been a gray area in American law. The U.S. Justice Department long has insisted that the Wire Act of 1961 bans interstate gambling. And in 2006, Congress passed the Unlawful Internet Gambling Enforcement Act, which was signed by President George W. Bush. It effectively banned financial institutions from handling any online gambling payments.

Ironically, both Bush and the majority in both houses of Congress were Republicans who otherwise put their bets on limited government.

But in 2011, U.S. Deputy Attorney General James Cole wrote, “The Department’s Office of Legal Counsel has analyzed the scope of the Wire Act ... and concluded that it is limited only to sports betting.” This cut the cards for states to legalize non-sports online betting.

Even under the 2006 restrictions, online gambling has continued, according to a recent study by H2 Gambling Capital, a consulting and data firm. In 2012, global online gambling amounted to $36.3 billion. Of that, 11 percent, or about $4 billion, came from the United States.

Although technically illegal, such gambling still was possible because Americans use such work-arounds as foreign accounts and prepaid debit or credit cards.

H2 estimated that, with online gambling becoming legal, the U.S. total by 2017 could come in as high as $7.4 billion.

Restricting gambling in 2013 to physical locations seems as retrograde as limiting Amazon.com to selling only books.

Congress currently has legislation, H.R. 2666, the Internet Poker Freedom Act of 2013. Sponsored by Rep. Joe Barton, R-Texas, it would legalize online poker and regulate it within the new Office of Internet Poker Oversight, to be established in the Department of Commerce.

And H.R. 2282, the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2013, is sponsored by Rep. Peter King, R-N.Y. It legalizes Internet gambling and regulates it through the Office of Internet Gambling Oversight, to be established in the Department of the Treasury.

“A common federal standard will ensure strong protections for consumers, protect against problem and underage gambling and make it easier for businesses, players, lawmakers and regulators to navigate and freely participate,” King said.

Such bills are strongly opposed by some conservatives who, in other areas, favor freedom and states’ rights. Columnist Ken Blackwell not only rejects these bills, but wants Congress to enact legislation to ban even the limited legal, state-sanctioned online gambling.

He warned of the danger to “teenagers and young adults and the elderly.” Other concerns are the use of online gambling to launder illegal money for terrorists and organized crime.

These concerns should not be brushed off, but can be dealt with through adequate regulation to ensure that only responsible adults engage in online gambling. The concerns are similar to arguments for banning alcohol a century ago. Prohibition showed that legalization, with regulation such as laws against drunk driving, was the best policy.

Gambling addiction is a problem, but one not limited to those wagering online. Taxes and fees on casino and racetrack gambling currently fund gambling cessation programs. Both bills in Congress include provisions to combat problem gambling.

Adults in a free society should be given great latitude in their activities. Although occasionally abused, gambling is a fun pastime for millions. We should let adults be adults.

Finally, the digital world keeps changing, becoming cheaper and freer. Laws on online gambling need to change with the times. More states and Congress need to enact laws to make online gambling legal.

Jonny Ferrari is managing director of the National Poker Tour.

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