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Sometimes it's impossible not to be cynical about the political process and what's really going on behind the scenes. Sure, people will often ascribe the worst motives to various politicians when other reasons may be more accurate, but it's difficult to see how Massachusett's governor Deval Patrick can put forth this new bill on gambling with a straight face. It pushes for the opening of three new casinos in the state, while simultaneously banning online gambling (which the federal government is already working on). Federal attempts at banning online gambling, however, have focused on stopping credit card processing and stopping the casinos themselves. Patrick's bill actually goes against the gamblers -- threatening them with up to two years in jail and $25,000 in fines. It's difficult to see how this bill can be seen as anything but a plan to try to squeeze more money out of the new casinos by making licenses a lot more valuable by totally banning the competition.
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no - it's not impossible not to be cynical about the political process and what's really going on behind the scenes....
everything in the government is done with ulterior motives, and with little regard to the welfare or the choice of the people -
Deval in disguised attempt to ban internet gambling
Massachusetts Governor Deval Patrick is the latest person in US public office to take aim at online gambling, though his bill seems doomed to failure if you look at the numbers.
Patrick, who is essentially a leftist with an otherwise right-on record, has suggested that internet gamblers should be fined and jailed, marking a shift from the usual ‘prosecute the gambling companies, not the punters’ line.
Nothing unusual in that, you might think, but Patrick’s recommendation appears within a bill aimed at making room for three more casinos in the state that he currently oversees. A thoroughly bizarre move, if he is concerned about his reputation, and savagely hypocritical given the main thrust of the bill.
To paraphrase, our man at the top believes that gambling is ok in an offline casino, but damn you if you have a wager online! Punishment is clearly the only option worth considering. He suggests a fine of up to $25,000 and up to TWO YEARS in jail. Seems totally reasonable, right?
Wrong! Keep in mind that The Poker Players Alliance reckons a quarter of a million people in Massachusetts regularly play poker online. And that's just poker. Criminals all, according to Patrick’s bill. It’s just as well that he is anti-capital punishment. Talk about alienating the proles…
To put this into some much-needed perspective, three casinos is worth something close to $1bn in licensing fees to the state, over a decade. In fact, I think that’s all the perspective we need right now. Although if you read on, you’ll see that the numbers don’t remotely stack up, assuming that the theory of enforcing such a bill becomes a reality (it won’t, it’s totally unworkable).
Regulate!
Meanwhile, another Democrat - Barney Frank - is lobbying for online gambling to be legislated in the US. Good luck, Barney. Not that he needs it, not with Peter Mandelson on his side. Regulation will happen sooner or later, although I’ve been saying that for about seven years now (Anyone care for a bet on the matter?).
Why regulate it? Well, it doesn’t seem to make any sense not to. Policing / enforcement is virtually impossible, and criminalising millions of otherwise law-abiding Americans (while turning a blind eye to offline gambling) is thoroughly indecent / stupid / self-harming. Besides, the US has a poor record when it comes to prohibition.
The upside? The US would reap many billions of dollars in taxes were it to approve a bill aimed at regulating the online gambling sector. Many, many billions.
Ok, so maybe some offline casinos would lose a little business if the country / state takes the route to regulation. But maybe they won't, since the casino experience is more than just gambling and it continues to thrive. The American Gaming Association suggests casino revenues have more than doubled since 1995, roughly the lifespan of the commercial internet.
If the bill takes effect, then what happens next? It won’t be the casinos who pay to lock up online gamblers, when Patrick marches them all to the state prisons. It will be the taxpayer.
So how much will this cost, potentially?
A little bit of digging finds that Massachusetts currently supports less than 12,000 prisoners at a cost of around $460m in 2007. We should now let the numbers do the talking…
If Patrick’s bill succeeds and he successfully rounds up all of the 250,000 online poker players in his state, then he’ll need to find another $10bn a year to incarcerate them. And he wants people in prison for up to two years, remember, so double that.
The fines these people would have to pay could cover maybe a third of the cost to jail them (based on the maximum $25k fine). I make that a sweet $20bn in costs, over two years, less a maximum of $7.5bn in fines. That’s a loss of $12.5bn. Or $11.5bn, if we factor in the effects of the $1bn in licensing fees paid by the three offline casinos.
All of this assumes that the state could house another 250,000 prisoners. Naturally, it can’t do this, so there will be additional development costs to build new prisons. See, the numbers just don’t work...
Neither does Patrick’s proposal. May it fail, and fail miserably, lest he becomes known for bankrupting the state of Massachusetts on the ridiculous notion that he believes gambling is both good and evil.Comment
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Internet gambling is a target of Patrick bill
Casino initiative makes it illegal
Even as Governor Deval Patrick seeks to license three resort casinos in Massachusetts, he hopes to clamp down on the explosion in Internet gambling by making it illegal for state residents to place a bet on line. He has proposed jail terms of up to two years and $25,000 fines for violators.
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Patrick, pushing casinos, wants to make Internet bets illegal
The provision, buried deep in Patrick's bill to allow three casinos to the state, puts the governor at odds with a fellow Democrat: US Representative Barney Frank, the sponsor of federal legislation to license and regulate online gambling nationally. Yesterday Frank strongly criticized the governor's plan to punish online gamers while inviting casino operators to set up shop.
"Why is gambling in a casino OK and gambling on the Internet is not?" Frank said. "He's making a big mistake. He's giving opponents an argument against him."
A 46-year-old federal law prohibits betting using telephone lines, which the US Department of Justice has interpreted as prohibiting all online gambling. The government's policy has been to prosecute the operators of Internet gambling sites, but not the gamblers.
Patrick's provision takes aim at both and would levy the same penalties on either end of the transaction. Courts have been divided over the legality of placing bets on line, and state laws vary on the issue. Massachusetts currently has no prohibition, and if its ban is adopted. it would join such states as Utah, Nevada, and Washington.
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.
"Several of the provisions of the governor's proposed resort casinos bill seek to clarify the laws relating to gaming in Massachusetts, including online gaming," said Kofi Jones, spokeswoman for the governor's chief gambling adviser, Daniel O'Connell, secretary of economic development. Others suggested the provision was included to make casino licenses more lucrative by preventing competition from online operators.
"If you were cynical about it, you'd think that they're trying to set up a monopoly for the casinos," said David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas.
Patrick's casino legislation, which has been introduced at the State House but is not expected to get a hearing until next year, would license three casinos in three regions of the state. Casino developers would bid on the licenses, and Patrick expects they would attract 10-year licensing fees of $200 million to $300 million for each casino.
Since the first Internet casino went live in 1995, online gambling has exploded nationwide. Users have flooded thousands of gambling sites, punching in credit card numbers for the rights to play cyberbingo and real-time poker from their homes. It still lags behind brick-and-mortar casinos, but online gambling has become a formidable industry, totaling $12 billion in 2005, according to Christiansen Capital Advisors, a Maine-based research firm.
Based on its reading of the 1961 Wire Act, which bans using telephone line to place bets, the US Department of Justice contends that operating online gambling sites is illegal, although most of the sites are operated offshore and do not fall under US laws. Last year, Congress approved a gambling bill that bars credit card companies from making payments to online gambling websites, making it more difficult to place bets. Frank's bill, which was filed earlier this year, would effectively overturn that law and license and regulate online gambling in the United States.
more stories like this"I believe in personal liberty," Frank said. "Adults should be able to do what they want. I wish my fellow liberals would not be so inconsistent on this issue."
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.
It does not say specifically how the state would enforce the ban, but the bill would establish an independent Gaming Control Authority and a division of Gaming Investigation and Enforcement within the attorney general's office, which would have broad powers to enforce regulations and investigate crimes.
But in trying to ban online gambling while expanding casinos, the governor's administration appears to be alienating a constituency that might otherwise support his gambling expansion.
The Poker Players Alliance, a group that says it represents the interests of online gamblers, began a letter-writing campaign last week and has generated 1,700 letters to the governor and various state legislators. The Washington-based organization has 16,000 members in Massachusetts, which is a fraction of what the alliance estimates are the 250,000 online poker players in the state.
"I feel betrayed by the very existence of this legislation," the letter read. "It's especially aggravating that this language is contained in a larger bill to expand casino gambling in the Commonwealth. This contrast is utter hypocrisy."
The organization, which recently campaigned against Governor Ernie Fletcher of Kentucky for nixing a proposed casino referendum, supports the governor's proposal for three Massachusetts casinos, but plans to oppose the overall bill.
"It makes absolutely no sense to me," said Randy Castonguay, director of the Massachusetts chapter of the Poker Players Alliance. "It's actually kind of laughable if you think about it."
Laura Everett, spokeswoman for Casino Free Massachusetts, a coalition of anticasino advocates, said that while some in the group may oppose online gambling, the organization is focused on fighting brick-and-mortar casinos. "We think the whole bill is a problem," she said. "One provision is not going to make a difference."Comment
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