Newsweek Paints Online Gambling as Threat to American Family

Caesars WSOP NevadaThe current issue of Newsweek features a feature column one-sidedly espousing the ills of online gambling, often through mischaracterizations and what I will term as imprecise or incomplete statements, more often than not by people being quoted.

If that wasn’t bad enough, the cover features a sullen pre-teen holding a tablet with the display showing playing cards under the headline: How Washington Opened the Floodgates to Online Poker, Dealing Parents a Bad Hand.

The picture and the headline are intended to convey the message that online gambling is the next great threat to the American family, and if that’s what you’re hoping to hear the article doesn’t disappoint.

Since the article is extremely one-sided, I’ll offer up the other side, which will be just as biased toward my point of view.

The DOJ Wire Act reversal

The article’s author, Leah McGrath Goodman, cites an often used talking point by online gambling opponents, stating that the DOJ’s 2011 interpretation of the Wire Act as it applies to online gambling was “… reversing 50 years of legal precedent…”

Of all the false arguments in this debate this is the most irritating.

U.S. Deputy Attorney General Virginia Seitz’s 2011 opinion that changed the Wire Act’s application to online gambling did not reverse 50 years of legal precedent, and it should be obvious why: The Internet wasn’t around 50 years ago, and online gambling only sprang up in the mid-1990’s.

What the 2011 opinion did do was reverse a 2002 opinion by the same DOJ that stated online gambling was covered under the Wire Act. Seitz’s opinion reversed the DOJ’s opinion (not legal precedent) that dated back just nine years.

This is what happens when you try to apply a law from 1961 to the Internet by the way. My suggestion would be for Congress to act on this issue.

Pandoras box is already open and has been for 15 years

McGrath Goodman goes on to opine that, “Seitz opened wide the door to online gambling—and in the process, critics say, may have opened a Pandora’s box. Lawmakers and experts warn that online gambling is dangerously addictive for some, especially children raised in a culture of online gaming and smartphones.”

Seitz’s opinion did nothing of the sort. What it did was allow states that are so inclined to take online gambling out of the shadows and install safeguards and consumer protections to the industry.

The new opinion allows states to regulate an industry that was already present, and offer some much needed consumer protections.

Opponents of legal online gambling have been offering us a false choice. Since 1998 there has always been online poker in the U.S., and there will always be online poker in the US whether it is legalized or banned.

The choice isn’t between online gambling and no online gambling; the choice is between regulated online gambling and unregulated online gambling. And the only way to get rid of unregulated sites is through legalization and regulation, prohibitions won’t stamp them out.

Enter the Congressman

Of course, Congressman Jason Chaffetz (R-UT) also makes an appearance in the column. Chaffetz has proven to have not done his homework on this issue in the past, and continues to regurgitate false claims about what state level online gambling expansion means across the country:

“I am afraid that if we don’t move quickly and get some decent regulations in place, which we really don’t have right now, it will be too late to stop it from reaching all the states,” Chaffetz is quoted as saying.

No Congressman, under the current opinion of the DOJ, each state will have the ability to decide if they want online gambling, unlike Chaffetz’s proposed federal ban which takes that decision away from the individual states.

New Jersey’s passage of an online poker hasn’t made licensed online poker available in Pennsylvania or in Utah. It has made licensed online gambling available in New Jersey.

Under Chaffetz’s proposed legislation, neither New Jersey, Utah, or Alabama can make this decision for themselves.

It would also be nice…

… if the people making these claims actually checked into the technology to see what it can or can’t do instead of making blanket statements that they are unsure of it.

According to the article: “Chaffetz is wary of claims that geolocational technology, which works better in cities than in rural areas and vast expanses of desert (due to their reliance on hot spots and cellular towers to triangulate players), can keep poker out of his state…”

I don’t even know what to say to the claim about cities vs. rural areas, since geolocation can use cell towers, but it can also use wifi which is far more accurate.

Has Congressman Chaffetz ever seen GeoComply’s real time geolocation in practice; has he ever attempted to register an unauthorized account at a licensed online gambling site?

One more Chaffetz line then I swear I’m done with him

Chaffetz also told NewsWeek, “I’d like to know a lot more about what happened, which is why I asked for a hearing. We can’t have an office in the bowels of the DOJ going against decades of legal precedent without Congress having any say.”

Actually we know how it happened Congressman.

In a nutshell: New York and Illinois asked the DOJ if online lottery sales were permissible under the Wire Act. Deputy AG Virginia Seitz offered a legal opinion stating they were and here we are.

Oddly enough the Newsweek article refutes Chaffetz’s attempts to delegitimize the Office of Legal Counsel, when George Washington University Law Professor Jonathan Turley said, “The Office of Legal Counsel once held a unique and revered position within the DOJ and government as a whole.” Turley went on to explain this “office in the bowels” as being, “viewed as the gold standard of legal analysis.”

The article redeems itself

Once it moves away from quoting the opponents of online gambling, the second half of the article is far more balanced (for the most part) and is a very interesting look at the real issues this debate should be fought over, beginning with the very real concern of problem gambling.

Despite what the hand-selected people quoted in the article imply: Current research asserts that problem gambling rates have not risen since the advent of online gambling.

Furthermore, online gambling bills set aside money to help fund problem gambling programs, which is why the National Council for Problem Gambling is neutral on these bills.

Still this is an important issue, but at present, identifying problem gambling and its triggers in all but extreme cases is an inexact science and far more research needs to be done.

Lindsey Graham; the Jason Chaffetz of the Senate

The article also talks to another anti-online gambling legislator at this point, Senator Lindsey Graham (R-SC), who notes that his state banned video poker machines in 1999, but “Now, because of the Obama administration’s decision, virtually any cellphone or computer can again become a video poker machine,” he said. “It’s simply not right.”

I challenge Senator Graham to open an account at any regulated online gaming site in New Jersey, Nevada, or Delaware from his home in South Carolina and gamble online. Or to have a 15 year old attempt to register an account in New Jersey.

I also ask Senator Graham to do the same with one of the unlicensed sites that have been operating in the US all along, where he will find no problem gambling online, or getting a minor through the nonexistent consumer protections.

His proposed legislation will create an environment where unlicensed sites are rampant and the safeguards and player protections of regulated sites do not exist.

Another false argument

The article next says, “Many sites assume players are old enough to play if they simply enter a credit card.”

This is true… if we are talking about an offshore, unlicensed site. A regulated site in the U.S. requires a stringent background check, including your Social Security Number.

It’s no different than applying for a credit card online, or renewing your driver’s license online. It’s not foolproof but it’s as safe as other eCommerce and financial transactions online.

Partisanship makes a few cameo appearances

One final point I would like to make regarding the one-sidedness of the article is the shining of the spotlight on pro-gambling lobbying efforts while glossing over the inordinate amount being spent by the anti- online gambling lobby — Sheldon Adelson famously has said he will spend whatever it takes to stop online gambling.

According to McGrath Goodman, “During his 2012 re-election campaign, he [President Obama]accepted more money from the gambling industry and tribal casinos than any individual politician now in Washington. (Adelson spent tens of millions of dollars in support of Mitt Romney and other Republicans, but most of that went to Super PACS and outside groups.)”

So if I’m understanding this correctly, Obama (who the author lumps into the pro-online gambling crowd due to the DOJ opinion occurring on his watch and other tenuous links) is in the pocket of the gaming industry but Romney et al. isn’t because Super PAC’s don’t count, even if they dwarf regular contributions. Ok gotcha.

Unfortunately, this is not a partisan issue, and online gambling advocates do not count the President as an ally. Bottom line, this is a state’s rights and consumer protections issue. Hopefully everyone reading the Newsweek article will see it for what it is, a well-written, provocative look at online gambling, but a very one-sided one.


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