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Democrats Government The Almighty Buck The Internet Games

House Proposes Legalizing, Taxing Online Gambling 473

Posted by Soulskill
from the twenty-bucks-says-it-gets-shot-down dept.
eldavojohn writes "Passed in 2006, the Unlawful Internet Gambling Enforcement Act is set to go into effect June 1. New efforts by Democrats in the House of Representatives aim not only to stop that but to legalize and tax Internet gambling. Jim McDermott (D-WA), said, 'This is a huge boon to the state governments. If you look across the country you're seeing programs cut. In Arizona, they just cut out a program for children's health for 40,000 kids. Here's a source of money.' Basically, the bill proposes that for each state, a 6% cut would be taken from all wagers and go to the state in which the bet was made online, while federal would get 2%. They estimate in the next decade this would amount to $30 billion for state and tribal governments and $42 billion for the federal government in new taxes. Banks and casinos appear to be very much on board, while the usual crowd (Republicans, Focus on the Family, Think of the Children) gathered in opposition to the move."
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House Proposes Legalizing, Taxing Online Gambling

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  • what a great idea (Score:5, Insightful)

    by Presto Vivace (882157) <marshall@prestovivace.biz> on Monday April 26, 2010 @02:08PM (#31986694) Homepage Journal
    what better way to fund state governments than predating upon the weaknesses of your citizens.
  • How? (Score:4, Insightful)

    by oodaloop (1229816) on Monday April 26, 2010 @02:12PM (#31986738)
    Given that many of the current online gambling sites are run anonymously by organized criminal networks outside the US, how would collection or enforcement work? Would gamblers be obliged to write how much they won on their annual tax returns, like we're supposed to note purchases made online?
  • by DarkKnightRadick (268025) <the_spoon.geo@yahoo.com> on Monday April 26, 2010 @02:12PM (#31986750) Homepage Journal

    Don't they already do that?

  • by Maxo-Texas (864189) on Monday April 26, 2010 @02:13PM (#31986756)

    a) Instead of showing ANY fiscal restraint, the governments kept expanding to take advantage of the property tax bubble.
    b) low interest rates pushed forward a lot of activity in the home building market, creating a lot of jobs which will not be replaced.
    c) the executive class, whose pay has increased from 50x average to 450x average is actively shipping jobs overseas (to the tune of thousands).
    d) the long term trend is wages will stagnate or drop towards those in BRIC. (brazil, russia, india, china). This means the value of houses, etc. will drop because people will have a smaller amount of money for paying for property. Smaller incomes also mean smaller taxes for the governments.

    So the long term trend is lower property taxes, lower property values, fewer jobs, lower paying jobs.

    The governments are going to absolutely hate it, but they are going to have to cut a lot of programs outside of welfare/unemployment benefit programs to prevent social unrest.

    People's expectations of living in a 3,000 square foot house are going to have to reset back to 1600 square foot houses (or even the 1100 square foot houses prevalent in the 1950's.

    And that's ignoring the scarily fast advances in robotics lately. An entire swath of basic manual jobs are on the verge of going away in a few years.

  • Re:How? (Score:3, Insightful)

    by drummerboybac (1003077) on Monday April 26, 2010 @02:14PM (#31986762)
    More likely, the international ones would still be illegailized and the commercial casino interests in the US(Harrah's, Bally's, Caesar's) would open legitimate front ends.
  • Unfortunately gambling effects everyone the person knows. It affects the families of gamblers as they resort to lying, stealing, and other means of getting money so they can continue to gamble. It interferes with work.

    Yes, there are those who aren't compulsive gamblers and can put it aside any time they want. But for those who can't, this is a bad thing.

  • by i kan reed (749298) on Monday April 26, 2010 @02:16PM (#31986808) Homepage Journal
    I know. But its so much worse of an idea than forbidding citizens from doing something they enjoy or care about, sending some to jail for such excellent reasons as otherwise they might be poorer, driving the behavior underground where the poor saps can be robbed with no recourse, and then not get any taxes from it at all. That would be not nearly as bad.
    Your point is so excellent.
  • by EvanED (569694) <evaned.gmail@com> on Monday April 26, 2010 @02:19PM (#31986868)

    ...why "Republicans" are against this?? Aren't they supposed to be in favor of small goverment and fewer regulations?

    Only if you believe the crap they've been spewing out. The GOP is as much big-government as Democrats are, just in slightly different ways.

  • by lcoscare (1121345) on Monday April 26, 2010 @02:20PM (#31986874)
    I guess it's much better to outlaw it and make these compulsive gamblers go underground, likley run by organized crime. And prohibition has worked out fantastically well every time it's been tried in the US. Look at how much safer we are thanks to the war on drugs, compared to say Holland or Canada.
  • by jfengel (409917) on Monday April 26, 2010 @02:20PM (#31986880) Homepage Journal

    You'd think that it would come under the auspices of the "personal responsibility" the Republicans are so keen to chant about. Except when it's something they're opposed to, in which case "personal responsibility" is apparently insufficient.

  • 8% of every wager? (Score:3, Insightful)

    by Anonymous Coward on Monday April 26, 2010 @02:21PM (#31986890)

    That sounds pretty extortionate. Consider that many games have a return rate in the high 90%s.

    Previously a hundred dollars could go through dozens of wagers before being reduced by half on average. Now, that same hundred will provide much fewer wagers for the the same game.

  • by flitty (981864) on Monday April 26, 2010 @02:22PM (#31986914)

    It affects the families of gamblers as they resort to lying, stealing, and other means of getting money so they can continue to gamble. It interferes with work.

    1. Lying isn't inherently bad on its own.
    2. There are laws against stealing already.
    3. "other means of getting money", if they aren't illegal, are a problem how?
    4. "It interferes with work", and they get fired. this doesn't affect me anymore than the guy who shows up drunk. In fact, it affects me less-so, considering the drunk guy could get me killed/injured.

    There are laws to take care of the effects of gambling addiction. The addiction itself should not be outlawed.

  • by 99BottlesOfBeerInMyF (813746) on Monday April 26, 2010 @02:24PM (#31986938)

    So the executive class is making 100 times what they were and corporations are making more for their investors by getting cheap labor. And the average person gets screwed.

    The thing here is, what you describe is not less wealth coming into the US, but the wealth coming into the US being less distributed among the populace. For example, you mention advances in robotics as a minus, but they're actually a productivity plus. They save time and allow for faster, cheaper manufacturing. You assume that profit won't make it's way to normal people.

    What generally happens in situations like this is wealth disparity grows, then comes to a head, then there's a revolution. This could be a real revolution that redistributes the wealth by killing the rich, or it can be a social one like the new deal. Executives and the people who own companies are making 100 times more? Tax them 95 times more and redistribute that money back into the populace. Heck, they pay a tiny fraction of what they did in taxes in the 70's, we can sure reverse that and put the money into government programs. In fact, that's a much more likely solution than a populace putting up with greatly decreased standards of living and reduced government programs.

  • by gujo-odori (473191) on Monday April 26, 2010 @02:26PM (#31986958)

    Not all Republicans. Granted, I'm a nominal Republican but really more of a Libertarian, but still, not all Republicans.

    There are some who trot out an argument reminiscent of "Think of the children!" (I have three, thanks, and I should imagine that by the time they're old enough to set foot in a casino they'll already be decent poker players, if they're interested) that is basically that "Since some people will gamble uncontrollably, we have to make online gambling illegal for everyone." Never mind that most people in the U.S live not far from a legal bricks-n-mortar casino, and bookies aren't exactly hard to find, either. Or that it's quite easy to ruin your life through excessive use of alcohol or tobacco, yet those remain legal.

    Just because some small percentage of the population cannot restrain itself for whatever reason(s), I just can't see that as a reason to ban it for the rest. Heck, some people drive their cars in extremely irresponsible ways and cause others to be killed or maimed for life, but we don't see any (rational) people calling for cars to be made illegal because of that.

  • Re:Poor Tax (Score:5, Insightful)

    by Killer Orca (1373645) on Monday April 26, 2010 @02:27PM (#31986974)

    For example, "the lottery" has regularly been shown to basically be a "poor tax." Isn't there a "usual crowd" who speaks out against regressive taxation? Aren't they leftists?

    I would actually argue it is more of a "stupid tax" but I also feel that way about most forms of gambling.

  • by ndogg (158021) <`the.rhorn' `at' `gmail.com'> on Monday April 26, 2010 @02:27PM (#31986984) Homepage Journal

    Unfortunately alcohol effects everyone the person knows. It affects the families of alcoholics as they resort to lying, stealing, and other means of getting money so they can continue to drink. It interferes with work.

    Yes, there are those who aren't alcoholics and can put it aside any time they want. But for those who can't, this is a bad thing.

    Are you really making that argument? History tells us that the best way to mitigate the consequences of such behavior is not to ban it completely (and thus creating unregulated black markets), but rather to legalize it, and regulate it so that it's under the purview of the law.

  • by CyprusBlue113 (1294000) on Monday April 26, 2010 @02:32PM (#31987056)

    The solution to revolution is creating a straw man early on before the process really takes hold, then you can control the revolution, even have them believing that you stand for their interests while they continue to vote against their own benefit while fervently attacking any real opposition. There are examples of this throughout history, and even not so historically. I am not going to Godwin my argument, but the basis lies in example there, and several other prominent places.

  • by vxice (1690200) on Monday April 26, 2010 @02:32PM (#31987072)
    I do wish people would stop using the taxation argument about legalizing it. If the only reason to legalize an activity is to tax it then it really shouldn't be legal anyways. Take for example murder, lets legalize it and tax it right? No. There are good reasons it is illegal. In the case of gambling there is no good reason for it to be illegal unless you're a pompous religious prick out to save everyones soul, that's the reason enough it should be legal and arguing about the taxation is just opening yourself to abuse by the gov't. Look at alcohol, the gov't taxes the hell out of it because it was illegal and they did us the favor of legalizing it for the taxes. They took something from us that they had no grounds to and then charged us to get it back. It will be the same with this or marijuana. We will all be so glad that the gov't has given us back a privilege they stole from us that we will accept their higher taxation.
  • by commodore64_love (1445365) on Monday April 26, 2010 @02:33PM (#31987076) Journal

    I object to gambling for the same reason I object to handing a beer to an alcoholic. It's enabling their disease and you are the pimp.

    If a private person wants to run gambling halls, that's fine with me, but the government should take a higher moral stance. The government should not be running Lotteries to prey upon gambling addicts. I've seen a lot of lives destroyed via their addiction to the State Lotto. Instead the government should be providing assistance to these people to help them stop (as we do with anti-drink and drive campaigns).

  • by Notquitecajun (1073646) on Monday April 26, 2010 @02:34PM (#31987094)
    The problem with gambling is the number of people who AREN'T personally responsible. A few too many people gamble with money they "can't afford to lose," and the rest of us have to pay through our tax dollars for their mistakes.

    I'm not against gambling per se, but it's one of things like drug use - the rest of us pay for the screwups.
  • by commodore64_love (1445365) on Monday April 26, 2010 @02:35PM (#31987128) Journal

    The government doesn't have to outlaw gambling. It just needs to stop being the Pimp (i.e. stop selling Lotto tickets). The ends (funding programs) don't justify the means (sucking money from addicts). It's immoral.

  • by ravenspear (756059) on Monday April 26, 2010 @02:37PM (#31987162)
    we should be able to do what we want

    Republicans are for that only if it doesn't conflict with their religious morals. That means if you like to gamble, if you like to look at pr0n, if you like to use colorful language, if you are gay, or if you like to something on Sunday morning that doesn't involve going to church, well then you are SOL.
  • by flitty (981864) on Monday April 26, 2010 @02:37PM (#31987166)
    If you can't think of a lie that was less harmful than the truth, you're only lying to yourself.
  • by srussia (884021) on Monday April 26, 2010 @02:43PM (#31987264)

    I've seen a lot of lives destroyed via their addiction to the State Lotto. Instead the government should be providing assistance to these people to help them stop (as we do with anti-drink and drive campaigns).

    Yeah, I've seen a lot of lives destroyed too via addiction to government handouts ^W^W state welfare. The government should be providing assistance to these... oh wait...

  • by Wyatt Earp (1029) on Monday April 26, 2010 @02:45PM (#31987282)

    The addicts will gamble, with this the states and federal government will get monies to help deal with addiction.

  • by MobyDisk (75490) on Monday April 26, 2010 @02:48PM (#31987332) Homepage

    Why is it totally different when something is done "over the internet?" Gambling is illegal in person, but it is legal if a network cable is involved?

    Suppose I setup a gambling room where everyone goes into their own stall and gambles "over the internet." If they will, I will give them their winnings right away, then take the payment over the phone. Maybe I offer this service for free and just profit by selling drinks. Of course, maybe they are actually playing against the person in the stall next to them, but that's legal now because it is was "over the internet."

    I'm not against this bill per se, but it is silly that if you did the same exact thing, but without the internet involved it would be illegal.

  • by Zerth (26112) on Monday April 26, 2010 @02:53PM (#31987406)

    Lying *not* inherently bad? According to what standard?

    "Does this make me look fat?".

    Blatant lie("No")
    Better lie("The other one looks better")
    Truth("No, your fat makes you look fat, and your haircut is atrocious")

    Which response has the highest net outcome for all parties? Unless the person asking has a truth fetish, they probably want to hear the better lie.

    Polite society functions on lies of omission and white lies.

  • by lorenlal (164133) on Monday April 26, 2010 @02:53PM (#31987412)

    If a private person wants to run gambling halls, that's fine with me, but the government should take a higher moral stance.

    You mean - If someone wants to run a gambling organization that is not subject to any regulation, that's cool? You mean like old school, mobster type jobs where if you didn't pay you ended up getting fitted for concrete insoles? Personally, I think that *responsible regulation* is the proper course here. That way, folks who choose to gamble are able to in a safe environment. And, who's to say the government should take a "higher moral stance?" According to some, smoking and alcohol are "immoral." I guess the government should stop taxing them and just outlaw that right? There's no preventing people from gambling if they have a problem, and I'll cite prohibition and the "war on drugs" as my comparison studies. Nobody forces anyone else to gamble.

    The government should not be running Lotteries to prey upon gambling addicts. I've seen a lot of lives destroyed via their addiction to the State Lotto. Instead the government should be providing assistance to these people to help them stop (as we do with anti-drink and drive campaigns).

    So, instead of siphoning off revenue from people who (once again) choose to participate, let's cut off a *voluntary* revenue stream? And better yet, let's cost our taxpayers even more money giving rehab to these folks. We'll ignore the fact that there's already help for them (Gambler's anonymous). Furthermore, if you really want to help those people who can't help themselves, then making gambling illegal can hurt them more than it helps. They'll go underground, gamble illegally, possibly get hurt or killed, and their rehab will be just that much seedier and nastier.

    Let's not ruin the fun part of gambling for the vast majority of us who can participate responsibly because some folks out there can't. If we outlawed everything that *could* be addictive, we'd have to off ourselves out of boredom.

  • by Attila Dimedici (1036002) on Monday April 26, 2010 @02:55PM (#31987444)
    What group is he talking about when he mentions "Think of the Children" as one of the "usual crowd gathered in opposition"? When I googled for a non-profit called "Think of the Children", the only thing that came up is a group that works to help orphans in Vietnam. I really can't see them taking a stand on this (and I checked their website.
    Part of the problem with the summary (besides listing a group that as far as I can tell doesn't exist) is that it lumps all of the opposition to this into one group. Focus on the Family opposes this because of the documented negative effects that gambling often has on families when one or both of the parents gamble away the money needed to take care of their children (whether that is a sufficient reason to outlaw gambling is another question, as is whether outlawing gambling actually addresses the real problem in those situations). The point is that it makes sense for Focus on the Family to oppose anything that moves gambling further into the "acceptable" social area.
    Republicans in general are more likely to oppose this as a new tax than because of its legalizing online gambling. Do you really think that this won't be used as an excuse for the government to monitor everyone's internet usage because some people are avoiding the tax?
  • by the_humeister (922869) on Monday April 26, 2010 @03:05PM (#31987592)

    Are we talking about gambling or Wall Street???

  • by melikamp (631205) on Monday April 26, 2010 @03:06PM (#31987608) Homepage Journal

    I would never again gamble online, because there is absolutely no way to tell if I am being scammed, but I am strongly in favor of legalizing and taxing online gambling, for one reason:

    I would like to judge the measure by consequences. If it is made illegal, people will still gamble just as much in off-shore casinos. Nothing at all can be achieved here as far as the human behavior goes. A punishment for a petty crime like that can only be slight (this is no black-and-white matter, like possession of x gram of marijuana: try defining "gambling"), and the discovery process needed to convict would have to be very expensive. This just cannot be effectively enforced. Only positive net changes will result from legalizing it: people will flock to a few legit online casinos and start loosing money to the houses and the colluding sharks, whereas now, on top of that, they also get scammed. There shouldn't be a law whose only purpose is to prevent a fool from parting with his money, while being told of the risks, but there should be one that helps many of us to do commerce online without getting the identity stolen. If one's only counter-argument is that "gambling is immoral", but one cannot point out how legalizing it would lead to negative consequences for the public, then one needs to re-evaluate his morals.

  • by MaskedSlacker (911878) on Monday April 26, 2010 @03:06PM (#31987622)

    Really, that's what you think they're going to spend it on? Just like with tobacco taxes, right?

  • by terjeber (856226) on Monday April 26, 2010 @03:08PM (#31987640)

    I object to gambling for the same reason I object to handing a beer to an alcoholic

    Your objection is dumb, immature, not thought through and misses the mark by a mile. If you want to make them "equivalent", then you'd have to say that you object to gambling for the same reason you object to the sale of alcohol. Otherwise you are claiming that all those who gamble are addicts, which is plainly wrong and a rather arrogant assumption.

    Just change your opinion, it is dumb.

  • by timeOday (582209) on Monday April 26, 2010 @03:23PM (#31987876)

    Yeah, I've seen a lot of lives destroyed too via addiction to government handouts ^W^W state welfare.

    You've seen it? Or you've driven through poor neighborhoods and thought, "I bet I'm supporting all these losers, and I bet it's not even good for them!"

    If nothing else, jobless benefits have a limited duration, so I would like to hear more about how you are establishing cause & effect here.

  • by bjbroderick (1019016) on Monday April 26, 2010 @03:35PM (#31988082)
    This is what sucks about America right now. Minority rule. Yes, gambling affects the people around the gambler. So? Do something about it! Get him to meetings, or an asylum. Stop making your problems the nations problems. And if you really think your poor hard luck brother in law is going to quit betting because it's illegal, you are nuts. 40 years of this bullshit thinking has put us in the toilet. Less government, yes! But more importantly, some top down government please.
  • by XxtraLarGe (551297) on Monday April 26, 2010 @03:40PM (#31988144) Journal
    I've noticed that whenever a story that is likely to be viewed as favorable by most Slashdot users and it pertains to Democrats, the label is prominently displayed. However, when there's one that would be viewed negatively, it's hidden. This article for instance. [slashdot.org] There's not one single mention of Massachusetts House Speaker Robert DeLeo's party affiliation. By the way, he's a Democrat. I'm not a D or a R (I'm more libertarian than anything else), but I just find the duplicity on this site frustrating.
  • by Anonymous Coward on Monday April 26, 2010 @03:53PM (#31988316)

    but the government should take a higher moral stance.

    Oh really? Based on whose morals? I don't see gambling as immoral. Are you one of the "think of the children" types? Some people have a problem, so nobody gets to play?

    The government should not be running Lotteries to prey upon gambling addicts.

    They aren't. Look at what's going on here: People want to gamble. The government wants new tax revenue. Whether or not the government tax gambling people will continue to gamble. Do you regulate it and get tax to spend on things we all need, or criminalize people and keep cutting budgets?

    I've seen a lot of lives destroyed via their addiction to the State Lotto.

    Yes, a minority of people have addictions to many, many things. Therefore it must be immoral for anyone to do any of those things.

    Instead the government should be providing assistance to these people to help them stop (as we do with anti-drink and drive campaigns).

    And who says with a 6-8% cut of all gambling revenue they won't be able to provide some funding for the troubled minority (who would continue gambling anyway perhaps without help)?

    I don't need _your_ morals telling me what _I_ can do with _my_ disposable income, tyvm.

  • Re:Poor Tax (Score:3, Insightful)

    by HarvardAce (771954) on Monday April 26, 2010 @03:57PM (#31988354) Homepage

    I would actually argue it is more of a "stupid tax" but I also feel that way about most forms of gambling.

    Participating in a lottery is not necessarily a "stupid" proposition, depending on the circumstances. I'm also not talking about cases where the payout of a particular lottery is great enough that the expected value of a lottery ticket is greater than the cost of a ticket. I'm speaking more to the personal utility of a particular sum of money (let's call it f(x), where "x" represents a sum of money, and the result is the utility of that sum of money). For a particular person, that function is most likely not linear. In other words, f(2x) is not necessarily 2f(x). For many people, f(lotto payout)/f(cost of ticket) can be many times greater than (lotto payout)/(cost of ticket). Given a sufficient level of this, the expected utility value of playing the lotto may end up being larger than the cost of the ticket, even if the expected dollar value of playing is still less than the cost of a ticket.

    I suppose that you could try and argue that people whose utility function of money is not linear are "stupid," but I would argue that not taking into account the utility a particular sum of money would give you would be the "stupid" move.

    To further expand upon this point, let's take a reverse case. Suppose I offered you a $1,000 ticket with billion-to-one odds (10E9) that paid 1 quadrillion dollars (10E15) if you won (and you were only allowed to buy one ticket). The expected value of the ticket is $1,000,000, so the odds should indicate you would take that offer. I would imagine that most "smart" people, if given that opportunity, would not take it, because their expected utility value of playing would actually be lower than the utility value of $1,000.

  • by Red Flayer (890720) on Monday April 26, 2010 @04:51PM (#31988886) Journal

    Well, gambling at its base is a tax on people that can't do math

    Au contraire, mon frere.

    Gambling is a way for those good at math to take advantage of those who are not good at math.

    A casino? Good at math. Its patrons? Not so much.

    A bookie? Good at math. His customers? Not so much.

    The state? Good at math (in this case). Lottery players? Not so much.

    Me being decent at poker? Good at math. My opponents? Not so much (when I win consistently, anyway :)).

    Etc.

    Although I will mention that for lotto, there's a utility aspect that makes the math equation work in favor of playing the lotto. A dollar a week (even compounded over many years) has almost no utility; life-changing winnings has extremely high utility. It's possible that the probability of winning, however low, is enough to make playing the lotto worth it. It's hard to quantify, though -- is $1 a week worth less than [probability of winning]*[jackpot value]? The human brain has trouble dealing with VLNs, so it's possible that millions of people are wrong, and it's a losing proposition to play the lotto. But I'm not convinced... especially since the act of just playing the lotto has a payoff.

    Anyway, I know I digress, but I think calling gambling a tax on people who can't do math isn't quite correct.

  • by timeOday (582209) on Monday April 26, 2010 @05:22PM (#31989294)
    I was wondering if you had some interesting experiences to share, or were expressing an ideological conviction based on thought experiments. So far it sounds more like the latter.
  • No, it wouldn't. It'd be a society where we would avoid situations that would cause us to want/need to lie.

  • by Hatta (162192) on Monday April 26, 2010 @05:30PM (#31989420) Journal

    Telling the truth has the best outcome. By telling the truth you discover whether your significant other is psychotic or not. That allows you to make your escape before anything serious like marriage or kids happens.

    If you don't want an honest answer, just don't ask. If that makes me not part of "polite society", so be it. I'd rather be part of an honest society.

  • by Anonymous Coward on Monday April 26, 2010 @05:49PM (#31989742)

    Addiction is going to be there without the state lottery. People that have a personal problem with self control will always be there. If we tax it, we have money to help, if we don't they will find a different addiction, drugs, drinking, whatever. Ever heard of Gambler's Anonymous?
    Hey what about World of Warcraft, there are people addicted to that and destroying their lives for it. Why not shut that down for those handful of loosers? (Gambling problems are not gambling problems if they are winning right?)
    I want my rights, and if some body has a psychological issue that sucks for them, but we need to stop catering this country to the bottom 5%. Maybe if we stop catering to them they will have the wake up call they need when living on the street, if nothing else they take their poor genes out of the pool.

    Freedom is the ability to make a choice and the responcibility to pay the costs of that choice.

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