Online Poker Should Be Dealt a Fresh Hand With Regulation

Bloomberg-Poker-graphicThe odds of winning the grand prize in the Powerball lottery are 1 in 195,249,054. State governments, by and large, encourage participation in this monopolistic enterprise, even though it randomly rewards a very few people with a very large amount of money for doing very little.

Oddly, most states, and the federal government, consider wagering online on a card game--in a fair fight, against other players of varying skill--a moral outrage.

A small but growing number of states are considering legalizing online poker within their borders, hoping to increase tax revenue. An intrastate approach may lead to useful innovations, but it would limit competition among gambling operators and restrict the available pool of customers for a given service to in-state players. It would also result in a crazy patchwork of regulation for an online activity that is inherently interstate.

To maximize the benefits of Internet gambling, and reduce its many dangers, federal legalization and regulation is the best option.

Current federal law is poorly conceived. In 2006 Congress ostensibly outlawed most online wagering under the Unlawful Internet Gambling Enforcement Act, an unclear and hurriedly assembled framework that for years left many players under the impression that online gambling was illegal but tolerated. It prevented businesses from knowingly accepting payments for “unlawful” gambling, but didn’t clearly define what was unlawful, or specifically address poker.

Then, in April 2011, the Justice Department indicted the founders of the three biggest poker sites open to U.S. players with money laundering and bank fraud, alleging that they were illegally disguising their gambling profits.

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