Study Shows Anti-Gambling Bill 'Harmful' to Consumers
Following passage of UIGEA, some publicly traded gaming companies "took a beating," said Sonia Arrison, director of technology studies at the Pacific Research Institute, which wrote the study for the Heartland Institute.
For instance, PartyGaming, the world’s largest online gaming company, fell out of the Financial Times Stock Exchange (FTSE) 100, "while World Gaming suspended dealings in its shares due to 'uncertainty' over its ability to continue trading," Arrison said.
Even though most of the world’s online gaming firms are not located in the U.S., and are not publicly traded, due to government policy, it appears that even those based in London and elsewhere are somewhat subject to America’s dominance in a global economy, said Arrison.
"That’s only the short term. In the long term, people who want to gamble online will find ways to do it, even if it means they have to visit shady spots on the Web," said Arrison. "Government policies that push innocent consumers into potentially dangerous black markets are misguided and harmful."
President Bush's bill should also "shame" his supporters because it exempts large parts of America’s gambling industry, including government-run lotteries, from new regulation, she aid
Bad for the Public
"That policy is very bad for consumers," said Arrison."By cutting out new competitors, the bill has the effect of pushing the gambling market in a monopolistic direction that will only abuse customers," said Arrison. "Of course, this problem may disappear as other countries make online gambling more widespread and European gambling firms sell out to U.S. firms with lobbying power."
Policies are more consumer-friendly overseas, however, she said, noting that the Brits are especially friendly for gaming firms.
The U.K. government has cut taxes on casino winnings, and next year officials are planning to legalize and regulate all Internet casinos.
"This will legitimize the business and may jumpstart the sector," said Arrison.
If it then emerges that analysts are correct and that U.S. firms are going to be looking to buy up some of the remaining European gambling sites, then there might be serious pressure for Congress to amend Bush's bill, or overturn it entirely with new legislation. "That would be a positive sign for a country that prides itself on freedom and wants to continue in that direction," said Arrison.
Arrison said that it is not the proper role of government to "dictate what individuals can and can’t do" for entertainment, as long as their actions do not harm others. "Some people enjoy gambling in their spare time and that is their business, not Rep. Bob Goodlatte’s, or George W. Bush's business. This legislation, in the long run, is not only burdensome but ineffective," said Arrison.
To be sure, gambling addictions can be harmful, said Arrison. But that is an "argument in favor of education and perhaps some government oversight of casino behavior," said Arrison. "It is certainly not an argument in favor of outlawing online gambling while real-space and government-run gambling continues."
In a recent hit movie “Thank You for Smoking,” the hero--a tobacco industry lobbyist--is under the gun for trying to protect people’s option to smoke cigarettes.
A similar movie could be made about gambling, said Arrison. The villain would be Rep. Bob Goodlatte (R-VA). Goodlatte has been fighting Internet gambling for some time, and he can now finally claim a success with the passage of H.R. 4954, "a port security bill with an anti-Internet gambling attachment. His bill is set to make it illegal for American banks and financial institutions to process online gambling payments from the U.S.," said Arrison.
Not surprisingly, Rep. Goodlatte sees himself as something of a do-gooder. “The passage of this legislation is a step in the right direction in the fight against online gambling and will help to cut off the money supply to these illegal outfits,” said Goodlatte.
Arrison said that the legislation does nothing but make American banks suffer the wrath Goodlatte feels towards the Internet gaming industry. "But a key question remains," said Arrison. "Will tightening the rope around bankers’ necks really stops online gambling?" The answer, in short, is no.
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