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Legalize Online Poker: Know When to Hold 'Em, When to Fold 'Em

8/12/09 - New Jersey Star-Ledger - View Source

By Jeffrey Wilson Mccoy

In his classic poker song "The Gambler," Kenny Rogers sings that every gambler knows that the secret to surviving is knowing what to throw away and knowing what to keep.

Sen. Robert Menendez (D-N.J.) recently introduced a bill that would lift the federal ban on internet poker. The bill throws away an inappropriate ban on a game of skill, while keeping sensible regulations in place.

The ban on internet poker has not been effective in crippling the industry, but it has caused problems in the United States. According to the Financial Times, online poker revenue reached $5.9 billion last year, but the U.S. saw none of it. This regulation has pushed poker sites to operate out of other countries and has required players in the United States to make transactions through foreign banks.

Menendez's bill will allow both the federal and state governments to tax revenues from these sites, and will allow U.S. banks to benefit from these transactions.

This restriction has hurt our country's reputation abroad as well. In 2007, the World Trade Organization court ruled that the U.S. was in violation of trade agreements as a result of its restrictions on internet poker. In June, the European Commission published a report stating the same thing and concluded it with a call for sanctions. And while U.S. Trade Representative Ron Kirk and EU Trade Commissioner Catherine Ashton have agreed to meet next month to discuss the situation, it is clear that other countries are upset about the U.S. refusing to uphold its end of trade agreements.

Enforcement has been a big problem as well. Online restrictions put the responsibility on banks to make sure they do not transfer money to these sites, which requires them to closely monitor every wire transaction. Even then, it may be hard to tell if the money is going to an online gambling site. Furthermore, players in the United States are still finding ways to play cards online, including transferring funds to overseas banks. Menendez's bill removes this problem because it gives U.S. players a legal, controlled way to play online.

Earlier this summer, the U.S. seized several bank accounts worth over $30 million dollars that contained money owned by online poker sites. The money in these accounts was being held to pay players. The country's policies toward online gaming are harming consumers. Players have no recourse if they don't get a check because federal officers are the ones preventing the payment.

Obviously there are risks, but Menendez's bill will help minimize those risks. Players are often allowed to play and bet in smaller increments online, and the negative side effects of live card rooms are minimized when it's just one person sitting at a computer. Unlike a casino, there are not a lot of people sitting together around a computer terminal. People cannot harm others out of anger, and there is no risk of drunken driving if the people playing are already home.

Furthermore, the bill will create a regulatory framework that will require age-verification procedures and protect consumers. Since it is legal, players will finally have recourse if they are cheated by a site. There is still a risk of addiction, but outlawing poker on the internet is not the solution. Those with serious addictions can still find other ways to feed that addiction; they do not need the internet.

Poker has a long tradition in this country.

Commercial casinos are legal in 19 states and there are approximately 350 American-Indian casinos where adults can sit down and play cards. It is time to allow responsible adults to play it online. The ban on internet poker is a nonsensical, unneeded, ineffective restraint on citizens' liberty; Menendez has a sensible solution. Congress should follow Kenny Rogers' advice and know when to walk away from a policy that does not work.

Jeffrey Wilson McCoy is a second year law student at the University of Colorado Law School. He lives in Boulder, and is an avid poker player.