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Thursday, October 07, 2004

The Legality of Poker, Online and Off
This a topic I've mentioned in the past, but I've never really devoted a post to it. And few things have happened recently to make me get semi-fired up about it again. The first part of this post has to do with traditional, brick & mortar poker, and the second has to do with online poker. [Warning: Some of what follows comes dangerously close to politics, a subject I generally try to avoid. Apologies in advance for boring or controversial content.] First, B&M.

The Legality of Traditional, Brick & Mortar Poker

We almost had a referendum here in Rhode Island about letting the Narragansett Indians (in conjunction with Harrah's) build a casino to compete with Foxwoods and Mohegan Sun in Connecticut. The Rhode Island state legislature voted to include the referendum on the November ballot, then the governor vetoed the move, then the legislature voted to override the veto. Finally, last month the governor brought the whole thing before a state court, which ruled that gambling in Rhode Island is illegal unless it is run by the state, and so the referendum was nixed.

I never really thought the casino had a chance. (There was a ton of opposition to it, much of it from Lincoln Park, a dog-racing track that also has slots.) But I had harbored some hope that the referendum might generate some real discussion of the pros and cons -- beyond the two billboards, for and against, that Harrah's and Lincoln Park had put up along I-95 -- and at the very least show how voters really feel. And if they feel strongly, then maybe that state constitution should be amended. But like I said, no chance. Not even a referendum.

There are a lot of arguments for and against traditional, offline gambling, and there are a lot of arguments about whether poker should be cast in with other forms of gambling -- and I don't want to get into too much of that here. I'll try to summarize my own view as briefly as possible: Despite being an avid poker player and frequent visitor to the Las Vegas Strip, I do not think that gambling should be totally legal and easily available everywhere. But I think that communities should be able to decide for themsleves about it --and reconsider their decision every few decades or so -- and that's what irked me about the episode here in Rhode Island.

Gambling is widely considered a vice, similar to pornography, drugs, booze, and smoking. For each of these vices, you've got your libertarian freedom-lovers who say that government has no right to restrict them. And for each of these vices, you've got your doomsayers, who say that if you allow these vices, we're, well, doomed, and therefore they must be outlawed.

My view is that people disagree about vices and always will. So what happens in practice is that for each of these vices America has come to very imperfect, generally controversial solutions. For drugs, the laws are pretty harsh. For alcohol, well, it was prohibited for a decade or so, it's been back for a while now, some states are very restrictive, and others aren't. Smoking was considered no problemo, then in the 1990s America changed its mind on that one -- the laws really vary from state to state but the main theme is tax, tax, tax.

What I'm getting at here is that for vices, legal arguments about rights and freedoms don't generally win the day (sorry, libertarians). In the long run, vice policies are mostly determined by public opinion about the vice in question. For example, drug laws are so harsh for many reasons, but a big one in is that most Americans are OK with harsh drug laws. Smoking is currently under attack in large part because fewer Americans are smoking. The tobacco lawsuits of the 1990s, in my opinion, were a very messy business, but I feel they were mostly a result of changing public opinion rather than any surprise revelations about smoking's health effects or the way the tobacco companies were doing business.

In general, I think this system works. I feel that when it comes to vices, communities should be able to use the law to create the kind of community they want. I don't think that states should have to use medical evidence about secondhand smoke to ban smoking in public places -- they should just be able to ban it on the grounds that the community finds it objectionable, just as they do public urination and very loud music. The downside is that the majority will tend to limit the freedoms of the minority, but we don't want people peeing everywhere, do we? (Notice how I use a joke to sidestep a deep philosophy-of-government question. Ahh, so clever.)

Back to poker. Wouldn't it be nice if states could just decide for themselves whether or not they want to have gambling in their state, and how much? It certainly seems like public opinion would support the legalization of gambling in more states. (Damn I wish Rhode Island had had that referendum, I bet it woudl have been a damn landslide :) America appears to have fallen in love with gambling.

Which begs the question, Is a backlash inevitable? Will the debate over poker only really begin once the mainstream media has a truly tragic story about somebody who lost his or her family's lifetime savings at the tables? So that then the freedom-lovers and doomsayers can really have something to argue about? Ugh.

No, the debate is rarely framed in terms of communities, or states, or the nation, deciding to what degree vices should be restricted. (Booze is the greatest exception here, and that was only after a big experiment in the 1920s.) Instead, it's usually all-or-nothing.

In Rhode Island, the state constitution says no, and that's that, no referendum, no debate. So states play legal games, and decisions are made based on technicalities, of which there are many since federal and state gambling laws are largely a mess. For example, Pennsylvania now has more slots machines than any other state except Nevada, because the state legislature decided that they are not slot machines but rather "video lottery terminals" and the lottery is legal in Pennsylvania (just as it is in Rhode Island and so many states). As a poker player it drives me nuts that the games with most negative EV are the only ones being allowed, but this trend has been going on for a while.

California, that very special state, was able to legalize poker rooms by reasoning before the courts that poker involves a skill element. Why have so few other states pursued this tactic? I don't have a good answer to that question. Instead I'll offer, only partly in jest, an alternative: Maybe we poker players should start arguing that poker is not a game of skill, but that is indeed a form of lottery!

The Legality of Online Poker

As I said before, the arguments about traditional gambling and how it should be regulated are longstanding and, for many states, pretty much resolved for the time being. But online gambling is a different animal.

Ever since Moneymaker won the WSOP -- having won his buy-in through what the U.S. government deems to be illegal Internet gambling -- I've been waiting for a debate about the legality of online poker to enter the mainstream. I honestly thought that Moneymaker's win would be more shocking, not in the "he was such an underdog sense," but in the "he won $10,000 though online gambling and now he's famous and oh my goodness what message does this send about respect for the law" sense. It never happened. Maybe the guy's just too likable. Still, despite countless articles talking about the spread of poker, despite an incredibly huge increase in online poker and another WSOP won by an Internet player, I am still waiting for any real debate or controversy. Why?

For starters, I must admit that realities of regulation are very different. Communities and states cannot decide for themselves about online poker. Well, they can decide, but if they decide no they can't do a whole lot to prevent people from playing anyway. In this respect, online gambling is unlike the vices of booze, drugs, and smoking, and much more like that other online vice, pornography. The U.S. Congress and the Supreme Court are still wrestling over how obscenity laws and the First Amendment apply to online pornography. While they do, the smut business is booming, and maybe the feds feel a little helpless. It doesn't seem too much of a stretch to say that the government is wary of the intersection between vice and the Internet, and I can see how they wouldn't want to open up a new can of worms.

You might be thinking, "Yup, for both porn and poker, the Internet takes the government out of the picture, and let's people decide for themselves." And that's more or less been the case with online gambling so far. Score one for personal freedom. But I worry that this analogy to online pornography does not bode well for the hope that online poker might eventually become legal, since many Americans view the growth of online pornography as the very worst thing about the otherwise neat-o Internet.

But here I am, stuck on public opinion, and the idea of the American public deciding how to deal with a controversial vice. That doesn't seem to be how it works.

In contrast to my naive views on how gambling policy should reflect public opinion, the consensus in the gambling world is that in reality it is all about the money. (But then, that's what a gambler would say, isn't it?) Take, for example, flipchippro's recent comments regarding the Global Gaming Expo in Las Vegas:
A large convention of gaming industry employees and experts from around the world gather in Las Vegas every year to discuss and guide the gaming industry into the future. Much of the discussions will center around the legality of online gaming and the influence it has on land based casinos. I believe it is only a matter of time until the US gets in step with the rest of the world and makes online poker legal. The big casino owners are finally beginning to realize that just like the once feared and hated Indian Casinos, online casinos are not only a good thing, but are providing the fuel for the current incredible popularity rise of gambling and poker in particular. When the first major land based casino moves into the online market the online gaming industry will quickly become legal and the US government will be the benefactor of all those tax dollars now flowing out of the country. The feds or individual states can also regulate and control the industry providing the consumers with confidence in getting a fair, unbiased game. I believe that we online scribes with our worldwide reach must become part of the effort to organize this movement to legalize and regulate online gaming.
(Here's another quality post from flipchippro on this topic.)

For anyone new to this line of thinking, I'll just add that what goes unsaid in flipchippro's quote is the idea that online gambling has remained illegal in large part because Las Vegas and others with an interest in currently legal forms of gambling oppose it. (Just like Lincoln Park opposed the Narragansett Indian casino.) The influence of the Las Vegas gambling industry is believed to be such that their opposition to online gambling would be more than enough to kill any effort to legalize it. As flipchippro says, if the Las Vegas casinos should embrace online gambling, so might the the federal government, since they could tax the heck out of it if it was run by regulated corporations within U.S. borders.

Though I worry it's a little pessimistic, I basically agree with flipchippro's main point, which is that the best hope for legal, online poker is to convince the relevant parties (the legal gambling industry and the U.S. government) that they'll make money off it. But while I feel it's the best hope, we should remember that the Mirage did try to get into online gambling just last year. Then again, as poker players know, a lot can change in a year.

Don't Rock the Boat?

And the change continues. The WSOP will go "on tour" next year, attempting to bring a famously Vegas poker experience to the rest of the country. And of course it will be televised, and the major online sites will probably provide super-satellites for each and every WSOP Circuit event. How long before some lottery-only state decides it wants in on the action? How long before anyone starts to care that it's largely sustained by an unregulated, possibly illegal activity?

Maybe never. Maybe online poker will continue to exist in a legal gray area, with hundreds of thousands of Americans happily playing, and the government not saying a word. Hmmm . . . maybe that's not so bad -- it's certainly better than backlash against gambling. The pessimist in me wants to end on that note and go play some online poker. The optimist in me thinks we should strive for more, because making online poker clearly legal would bring countless more players into the game. Wait, no, that's the greedily optimistic poker player in me saying that. The true optimist in me thinks we should strive for more so that the law reflects Americans' real views on poker and gambling, and an activity that millions of responsible Americans enjoy can formally become a legitmate hobby instead of being viewed as a possibly illegal vice.

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