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This is part 4 of a multipart series of articles regarding proposed anti-gambling legislation. In this article, I continue the discussion of the reasons claimed to make this legislation necessary, and the facts that exist in the real world, this time discussing the “drain on the economy”, and money laundering.

The legislators are trying to protect us from something, or are they? The whole thing seems a little confusing to say the least.

As mentioned in the previous article, the House, and the Senate, are once again considering the issue of “Online Gambling”. Bills have been submitted by Congressmen Goodlatte and Leach, and also by Senator Kyl.

The bill being put forward by Rep. Goodlatte, The Internet Gambling Prohibition Act, has the stated intention of updating the Wire Act to outlaw all forms of online gambling, to make it illegal for a gambling business to accept credit and electronic transfers, and to force ISPs and Common Carriers to block access to gambling related sites at the request of law enforcement.

Just as does Rep. Goodlatte, Sen. Kyl, in his bill, Prohibition on Funding of Unlawful Internet Gambling, makes it illegal for gambling businesses to accept credit cards, electronic transfers, checks and other forms of payment for the purpose on placing illegal bets, but his bill does not address those that place bets.

The bill submitted by Rep. Leach, The Unlawful Internet Gambling Enforcement Act, is basically a copy of the bill submitted by Sen. Kyl. It focuses on preventing gambling businesses from accepting credit cards, electronic transfers, checks, and other payments, and like the Kyl bill makes no changes to what is currently legal, or illegal.

Previously, I discussed a quote from Goodlatte “Jack Abramoff’s total disregard for the legislative process has allowed Internet gambling to continue thriving into what is now a twelve billion-dollar business which not only hurts individuals and their families but makes the economy suffer by draining billions of dollars from the United States and serves as a vehicle for money laundering.”

In that article I covered the comments about Jack Abramoff, and damage to individuals and the family.

Also included in that quote is a comment that online gambling drains billions of dollars from the US economy.

There are a few problems with this statement.

If you were to assume, as these politicians seem to, that online gambling consists of Americans putting money in and the off-shore gambling businesses taking money out, then they would have a completely valid point. However, just as in any industry, there are primary businesses and there are secondary, tertiary, etc. businesses involved. For instance, the online gambling organizations spend millions of dollars on advertising of various types, which goes back into the American economy.

In spite of obvious thinking to the contrary, Americans more than occasionally win money from individuals in other countries, or win prize money put up by the gambling businesses, thus draining funds from those economies which are then spent in America. The gambling businesses also routinely give back to the players in the form of bonuses, prizes and gifts, which also go back into the economy.

Even if we were to assume that the statement is largely correct, who is to blame for the movement of money out of the country?

Once again, we need to consider this industry just as we do any other industry. Obviously, there is a product involved that a large segment of American society wants. Just as with other products such as steel, electronics, textile and clothing, and cars there is a demand in this country, but the supply has moved offshore, thus draining funds from the American economy.

The gambling operators have moved to other countries due to the political climate in the U.S. If given the opportunity, many of the current gambling organizations would be happy to set up operation in the U.S. and be regulated and taxed. As well, many of the current land based gambling establishments would set up online gambling sites in the U.S. to compete.

We chased the online gambling companies away, and now we are bitter that they earn a profit off of our citizens, by providing a service that many Americans want.

Now we want to pretend that we can shut them down, at least as far as Americans are concerned. It isn’t going to work, it has never worked in the past, and it will not work now.

The last part of the quote from Goodlatte mentions money laundering, a concern that seems to be on the mind of anyone who opposes online gambling.

Again, the truth of the matter is much different from the rhetoric.

Before any individual can begin to gamble online, they must first establish an account with an online gambling company. In the process of doing this, the individual provides personal information.

In the online gambling industry, the flow of money is electronic. You start with money in a bank account, transfer it electronically to a payment service, such as Neteller, and then deposit the money into an online casino or poker room, again electronically. Note, that before you can transfer money to Neteller you must set up an account, providing your name, address and email account. You must also connect a bank account to your Neteller account, or take similar action in order to facilitate the transfer of funds. This further identifies you.

All of these transactions are tracked, and recorded for future review. The online gambling sites need a rigorous system of tracking and review to protect themselves and their reputations.

Once the money is on deposit at an online gambling business, the site monitors, tracks, records and reviews all betting activity. Of course they do this to protect themselves, and their customers, from cheating, fraud and errors.

At some point, individual customers remove funds from the online gambling operators. Once again, these electronic transfers are monitored, tracked, recorded and reviewed in order to protect the site, and its customers. In many cases, before you can withdraw funds for the first time, you must provide further proof of identification, such as a copy of a driver’s license.

Contrast this with similar transactions in casinos, racetracks, state lotteries and VLTs.

For example, you walk into a casino with cash in your pocket. No one stops to ask your name or check your identification.

You walk up to a cashier and get some chips. The cashier does not know you’re your name, or request any identification.

If you would prefer, you go to a blackjack table and get some chips and play for a while. You wander over to the roulette wheel and place a few bets. Bored with this you head over to the craps table and gamble there for a while. Sometime later, you head into the poker room, sit down, and play poker for a while with people you have never met.

None of the dealers or other individuals asks your name, or checks any identification.

Eventually, you take your remaining chips to a cashier, and change them for cash. Once again, no one asks your name or looks at any identification.

Once I leave the casino, did I win money or lose? If I won, how much money did I win? The casino doesn’t know. They don’t even know my name much less anything else about me.

Now, where would I rather do my money laundering? In a casino, where I am completely anonymous, or in an online gambling operation where they know the name and address of every player? Would I rather play where I can claim to have won any amount I like, or in an online gambling operation where transactions are tracked, where bets, deposits and withdrawals are not only tracked, but are reviewed for patterns such as chip dumping, collusion, and fraud?

It would seem that if law enforcement were worried about money laundering, and the funding of organized crime and terrorism they would welcome online gambling where the money trail can be followed so completely and accurately. Instead of harassing online gambling operators, maybe they should welcome new partners in the fight against crime and terrorism and learn to work with them.

For more detail, and similar articles, contact the author at http://A1-PokerInfo.com.

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