The Department of Justice (DOJ) recently released a decision on the scope of the Federal Wire Act, a 1961 law that prohibits certain types of gambling businesses.
According to the DOJ’s opinion, the Federal Wire Act applies to sports betting but not to other forms of online gambling like Internet poker. I’m glad the DOJ finally listened to the pleas of thousands of Americans and clarified a vague rule that was standing in the way of the development of a fair and safe online poker market in the U.S.
Since that decision in late December of 2011, lawmakers at the state and federal levels have been considering proposals to licence and regulate a U.S. online poker market, but the news is also raising concerns in some circles that legalizing online poker would only perpetuate underage and problem gambling. For these individuals, the natural reaction is to maintain the all-out ban on online poker. If that happens, Americans will continue to play online poker on foreign websites. The only difference will be that the U.S. government won’t be able to do anything to protect them.
First, a little background. The great game of poker is an American pastime that has been enjoyed by presidents, Supreme Court justices and many members of Congress through the years. Today, millions of Americans play for recreation and, in some cases, for their primary or secondary income. Though the DOJ has always agreed that Internet poker is not illegal for the player, enforcement of the Unlawful Internet Gambling Enforcement Act (UIGEA) and, until recently, a vague description of what type of online wagers violate the Federal Wire Act have forced online poker companies to operate outside of the U.S. Along with the loss of significant revenue and jobs, this has resulted in the outsourcing of consumer protections.
Given America’s significant role in pioneering the Internet, it boggles the mind that an online version of poker should invoke such restrictions. As a father, I understand the natural inclination to want to protect our kids from harmful material on the Internet. But as a former senator of the great state of New York, I also understand the importance of upholding the core principles this country was founded on: freedom, competition and leadership.
The challenge is not how to stop the evolution of poker, because frankly it is unstoppable, but rather how we can strike the right balance between ensuring Americans’ personal freedom and creating a smart regulatory structure to protect consumers. This is a formidable task indeed, but in fact the framework has already been proposed for consideration through congressional legislation numbered H.R. 2366. Instead of outsourcing our consumer protections to foreign countries, smart legislation, such as this bill, would include the “best of breed” technologies that have already been tested in various European countries that have been licensing and regulating the online poker market for years. Take, for instance, the technology that requires players to not only verify they are adults, but also to prove they are a specific adult whose identity can be separately verified. This technology is already effective for securing Internet banking and will be required by any licensed U.S. online poker operator.
We can also protect Americans with gambling problems by allowing players to set limits on how much they want to deposit and create a list of excluded people who are not allowed to play on licensed sites. In addition, we have the tools to identify players who are exhibiting signs of being problem gamblers and proactively alert them and provide resources and information to help them evaluate their playing habits. This too should be required and properly enforced by every licensed site.
If we are serious about protecting problem gamblers and our kids from fraud and abuse online, then we need to create a licensed and regulated U.S. online poker market. Through effective legislation, we can protect our citizens while ensuring a competitive and fair marketplace for poker players. It’s time Congress looks beyond the status quo of doing nothing and takes on the responsibility of protecting American citizens.
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