Sunday, October 15, 2006

In the recent movie "Thank You for Smoking," a tobacco lobbyist comes under
fire for working to protect people's right to smoke. A similar movie could
be made about gambling and the villain would be Representative Bob
Goodlatte. The Virginia Republican has been fighting to enact legislation on
Internet gambling for some time, and he can now finally claim a good deal of
success with the passage of HR 4954, a port security bill with an
anti-Internet gambling attachment. Goodlatte's Unlawful Internet Gambling
Enforcement Act (UIGEA) is set to make it illegal for American banks and
financial institutions to process online gambling payments from the United
States. "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," Goodlatte said. It is true enough that the
legislation makes banks suffer the wrath that Goodlatte feels towards the
online gaming industry, but a key question remains. Will tightening the rope
around bankers' necks will really stop online gambling? Following passage of
UIGEA, gaming companies took a beating. PartyGaming, the world's largest
online gaming company, fell out of the FTSE 100 while World Gaming suspended
dealings in its shares due to "uncertainty over its ability to continue
trading." Most of the world's online gaming firms are not located in the
U.S. due to government hostility, but now it appears that even those based
in London and elsewhere are subject to America's dominance in a global
economy.

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. Government policies that push innocent consumers into
potentially dangerous black markets are misguided and harmful. Goodlatte's
bill should also shame his supporters because it hypocritically exempts
large parts of America's gambling industry, including government-run
lotteries.