November 13, 2007

Deval vs. Poker

I don’t play poker for real money online. There are various reasons for this. One of those reasons is that the federal government apparently considers it illegal.

In the past, the feds have only gone after the poker houses, not the individuals looking for a game. But when PayPal stopped allowing people to fund their stakes through their online service (not coincidentally, about the time they were merged with eBay) it started to get more and more difficult to play poker online for money.

While I’m not really interested in playing poker online now, I might consider it if it were easier to do and legal. And it’s something I think adults should be allowed to do. When people object to it, I want to know the reason.

Does our governor, Deval Patrick, object to online gambling? Apparently. His new bill would jail internet gamblers for up to 2 years and fine them 25 thousand dollars.

WTF, Deval? Is internet gambling such a problem in Massachusetts that you feel we need stricter laws to crack down?

At the same time Deval is going after the little guy for relaxing with an online poker game, Barney Frank has been fighting the federal ban. Instead of preventing online gambling, he’d like to license and regulate it. “It’s a free country” to me means allowing people to engage in activities they want to pursue, if they don’t infringe on other people’s rights.

But what annoys me further is this:

Patrick officials declined yesterday to explain the governor’s rationale for including the provision in the proposed legislation. They also would not respond to Frank’s comments.

Governor Patrick, we deserve an explanation of your objections. It can’t be based in morality, because this is the bill that allows three casinos to be built in the state.

Is this, perhaps, something slipped in there as a bonus to the casino companies, or perhaps to mollify supporters of the state lottery to help make all those involved parties more profitable?

I would take a dim view of new laws that solidify a restriction of our rights (and necessitating the spending of even more money from state coffers to enforce those laws) just to improve the bottom line of some companies.

And how about this bit of the bill:

Patrick’s provision, which is described in three paragraphs of the bill, applies to anyone in Massachusetts who places or receives a wager of any type using a telephone, cellphone, Internet, or local wireless networks. It also applies to anyone who knowingly installs equipment for transmitting wagers. The provision also specifically exempts the proposed casinos from the law.

Installing online poker software could certainly be characterized as “knowingly installing equipment for transmitting wagers.” Even if you don’t plan to use it for wagers. Are they going to monitor internet traffic to see if people are playing poker online? Will the play-money players be harassed in an effort to find the law-breakers?

This bill stinks.

Posted by James at November 13, 2007 12:22 AM
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JP, I have a tough time with this one. I think that the problem with online gambling is that for gambling addicts (and there are MANY), it can go undetected for SO long until someone is bankrupt. There have also been instances where folks have defaulted on gambling debt racked up on credit cards, which DOES impact other folks because the credit card companies offset that debt by charging the hell out of the rest of us.

It's a tough call. But I know there have been studies where they've shown what opening casinos in an area does to the local economy, both in terms of increased debts as well as what it does to improve the local economy, but I have no idea if they've extrapolated that to online gaming.

Posted by: pippa at November 13, 2007 6:38 AM

I don't see that, with certain regulations, how online gambling would be any different from casino gambling.

One could argue that alcohol should be banned, but instead we choose to regulate it. Americans aren't children who need to be told what to do.

In the context of this bill, it is certainly not being made clear what the objection is.

Posted by: James at November 13, 2007 9:29 AM

I agree, this bill is foolish, at least on the surface.

Maybe it's a precursor to outlaw all forms of gambling for one of two reasons:
1) So we CAN'T have casinos (via incremental gambling laws) or
2) So Casinos have no competition

And maybe a third reason could be lack of regulation for taxation on winnings via online gambling? Restricting gambling in Massachusetts would guarantee that a decent chunk of money will come right back to the state, and if people are online gambling, they are not investing (for now) in scratch tickets and the lottery.

I suppose we'll find out soon enough?

Posted by: Derek at November 13, 2007 2:16 PM

Because there is no reason given, it's hard for me to address whatever the concerns are by giving my opinion. I hope we hear some reasoning soon.

If it happens that it is a tax issue, then that could certainly be addressed by legalizing online gambling at the federal level and creating some mechanism for reporting winnings.

however, I don't believe that most of the taxes from gambling come from winners. It's well known (or ought to be) that most of gambling is a losing proposition over the long term. The real tax money comes from the casinos. So, right there you could be looking at a big motivating factor, as the state will not see money from online betting halls.

Unless some deal could be struck to distribute taxes to the states if betting takes place within the state.

Again, that's a matter of regulation.

It's possible the governor has already looked into this and has seen no way of negotiating with the people involved. If that is the case, I would want to know.

Posted by: James at November 13, 2007 2:23 PM

It does look like protectionism for the new casinos (and the revenue stream they will provide the state). If someone is a problem gambler, they have psychological issues and WILL NOT BE DETERRED BY FINES OR JAIL TIME. I mean, why would the threat of being fined 50K affect someone who seems oblivious to the threat of losing their house?

Posted by: David Grenier at November 13, 2007 2:26 PM

It is terribly sad when somebody has a psychological problem such as an addiction to gambling, alcohol, food, shoplifting, etc.

However, it's not reasonable to ban services or goods because a minority of people have an illness that is exacerbated by the service or good.

There should be other ways of taking care of those people, through counseling and rehabilitation, and if necessary, by removing them from society so they can't do any harm (e.g. drunk drivers).

Yeah, life is sad. For some people, it really, really sucks. But I agree with James, I don't see the gambling issue as different from drinking. Too many people want to do it for it to be banned outright, and banning it outright can make it dangerous. Compulsive gamblers will gamble illegally if they can't gamble legally, and there will always be a market for it, if not legal, then illegal. Let's take the luxury tax for the state, rather than having it go to organized crime.

Posted by: Maggie at November 13, 2007 3:06 PM

There is a pretty easy answer to Patrick's motivation: Revenue. Patrick doesn't want MA citizens giving their gambling money to anyone other than the State of Taxachusetts.

Call me jaded, but that's how it looks to me.

Posted by: Kitten Herder at November 13, 2007 8:34 PM

What are we, like, 32nd lowest in the nation for combined tax burden? I love it when people refer to the state as "Taxachusetts." Check your pithy soundbites before you repeat them, please. You're perpetuating a myth.

Posted by: Maggie at November 13, 2007 11:03 PM

I think we're somewhere around 28th in the nation for combined local and state taxes. Not bad at all.

Complete combined tax burden (including federal) puts us at more like 10th IIRC, because bay staters tend to pay higher federal income taxes. That's no fault of the state -- I think it is because of having a large middle class toward whom the tax burden has shifted steadily in the last decade. I'm not expert and that's just a guess.

I do know that that the weighty federal taxes throwing the ranking off reflects the reality that bay staters pay more than their share (state-wise) compared to the federal aid Massachusetts gets. Of course, if you moved away from Massachusetts, those federal taxes would follow you (unless you also changed your income) so it can't really be held against the state.

Posted by: James at November 13, 2007 11:33 PM

I was getting the number from a 1995 CNN report (I'm loath to put links in because it seems to delay my posts), but I thought I had heard it also recently on the radio, so I think this year's data is similar. I haven't looked for the tax foundation page on which CNN is basing the report, but it seems to include even more information than the combined state and local tax number (I've seen the 28 -- I think this year it's 27 -- number you quote on the tax foundation website.)

I would rather the state received income from an optional luxury tax like gambling than from raising income taxes... I'm really not sure what the objection is there. "Businesses should get my gambling dollars so a few people get rich rather than the state so we can have roads and education." (That's just a guess... of course we'd all rather see big business get the money so they can lobby for... more rights for big business!) I don't like paying taxes any more than the next guy, but I really don't get whining about them, especially when the money is going to be spent anyway, it's optional, and the choice is the money going to a business vs. the state. Perhaps it's the fear that some person from the lower class might get free job training and be able to do more with that tiny advantage than the advantaged complainer does with his/her upper/middle class background, or perhaps the fear that somebody might get health care or (gasp) an abortion when really god is trying very hard to punish those people by making them poor in the first place... I don't get it. Obviously a corporation would spend the money in a way that benefits society more.

Posted by: Maggie at November 14, 2007 7:10 AM

I would think the ease which you could bilk people would be the main issue. I think that people are still figuring out how to regulate on-line stuff. You can't buy alcohol over the internet either (at least in MA) because it would be too easy to get around the drinking age. I can see similar arguments for gambling.

Posted by: B.O.B. (bob) at November 14, 2007 8:07 AM

I think the main reason you can't buy alcohol over the Internet is the same reason you can't buy it by mail either: because you can't ship alcohol into MA from another state. I assume this is for tax reasons. In many (most?) other states you can join a wine-of-the-month club, etc.

I'm not sure the time and expense involved in getting beer and wine this way would be appealing to underage drinkers in any case, since it's much easier, faster, and cheaper just to have an older person go to the liquor store for you.

Posted by: Julie at November 14, 2007 9:40 AM

Julie's right - the internet alcohol prohibition is for tax reasons, not over concern for underage drinkers.

At 16, it's easier to get an older person to buy you booze than it is to get a credit card.

Posted by: James at November 14, 2007 9:43 AM

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