Washington's Hypocritical Paternalism

And I mean the state of Washington, not Washington DC. Well, this time anyway. Next week their new law banning internet gambling goes into effect and anyone caught playing poker online could face penalties equivalent to those who are caught possessing child pornography. No, I'm not making that up, the penalties are the same. This law passed the state legislature with virtually no opposition (unanimously in the Senate and with 5 votes against it in the House), and now the state is lying to citizens and telling them that it won't really apply to them:

Although the head of the state Gambling Commission says it is unlikely that individual online gamblers will be targeted for arrest, the new law carries stiff penalties: as much as five years in prison and a $10,000 fine.

This is a lie. Individual online gamblers are the only ones the law prescribes penalties for, no one else. Why? Because they're the only ones the state can go after. It's already illegal to set up an online gambling site in the US, that's why all of the online gambling sites are set up in Costa Rica, Canada, Gibralter, the Isle of Man and so forth. There's nothing the state of Washington can do to those sites. The only people they can go after are the individual players. And how's this for an admission:

Day said the intent of the new law is not to give agents greater incentive to track online gamblers and throw them in prison. Jailing small-time online gamblers is "not the focus of our work," he said.

But he confirmed that commission agents had gone to the homes of several state gamblers (fewer than half a dozen, he said) about a year ago to warn them that such activity was illegal. No one was arrested.

But now they can and wil be arrested. But all of this brings up one major question: how are they going to know who's gambling without tracking all of their activity online? Money transfers to the gambling sites are all handled by offshore operations like Firepay and Neteller and those transactions are not traceable by the government (they can track your money going to the pay service, but not where it goes from there, and those services can also be used for lots of perfectly legal money transfers). The only way they can know is to violate our privacy by tracking everything we do online.

How did they know whose homes to go into a year ago? I'm sure a subpeona in court would reveal that information and would be very interesting indeed. And it appears that a legal challenge to the law may be on the way:

"To say playing poker in card rooms is legal but that it's a felony to play online is insane," said Kerry Welsh, 47, of Bellevue.

Welsh is considering taking a wireless computer outside the state Capitol when the law takes effect and playing Internet poker as a protest until he's arrested.

I'll gladly donate money to anyone who wants to challenge this law in court. And Welsh helps point up the rank hypocrisy of the whole thing - yes, it's true, poker rooms are legal in Washington. You can play poker in any of lots and lots of card rooms, but spend 5 years in prison for playing poker at home on the computer. And the new law also exempts horse racing; you can still place bets on horse racing online in Washington. Why? Because they have a powerful lobby and bought off the legislators to put in that exemption.

In fact, the whole bill was paid for largely by the brick-and-mortar cardroom companies who don't want the competition. Welcome to democracy, where the power of government goes to the highest bidder and they can even pay the government to get rid of their competition - all under the guise of morality and protecting the public, of course. Utter hypocrisy. I can't even begin to express how angry I am over this, and it doesn't even effect me. I'm so pissed that I'm going to go and play some online poker right now.

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Today's right wing has a social agenda that advocates greater government social control on virtually every issue it tackles: internet gambling, pornography, contraception, abortion, stem cell research, in vitro fertilization, gay marriage, gay adoption, etc. Yet they still and with great hypocrisy rely on a rhetoric that champions individual liberty?! It is long past time that they get called on that.

Well, the catch is that the Right isn't a monolithic bloc. I've always seen it as three distinct groups with overlapping agendas.

You've got the fundamentalists, who are big on the social issues and only pay lip service to the idea of liberty.

Then you've got the devout capitalists, who like the idea of liberty, which they define as "The right to earn money, plus any additional rights you can afford to buy with that money." They're generally at odds with the fundamentalists over social issues. Every vice is a potential source of income.

Finally you've got the jingoists and the xenophobes. They're confused by the idea of liberty. They'll readily say, "The terrorists hate us because of our freedom!", but they'd be hard-pressed to go beyond the slogans and say what freedom means to them. They're in the middle on social issues: They like pornography and gambling, they're split on abortion, and they're vehemently opposed to gay rights.

So the platform is a mix of all of these views. The capitalists are the most sophisticated and they tend to get results where the other two groups have to settle for rhetoric. (So we see a huge amount of anti-abortion rhetoric from conservative politicians, but somehow Republican-appointed Justices continue to affirm the core of Roe v. Wade.)

They're all united by their hatred of the Soviet Union. (Obviously they hate it for three completely different reasons.) I've never been able to figure out why things didn't fall apart when the Soviet Union collapsed. But I keep telling myself that it's going to happen any day now!

By ChaosEngineer (not verified) on 01 Jun 2006 #permalink

That's a counterproductive form of protest, dude. First, you'll probably lose money that you could otherwise spend on this very useful blog; and second, if you're busted, you won't be able to blog from jail -- especially if the authorities single you out for criticizing their total hypocricy and corruption online.

How did they know whose homes to go into a year ago? I'm sure a subpeona in court would reveal that information and would be very interesting indeed.

This implies a more effective form of protest: force the state to reveal just how much invasion of privacy it will take to enforce this law.

The biggest hypocrisy is that the guys who are most in favour of these laws (apart from the bricks and mortar casinos, of course) are the same right wing moralists who bang on about individual freedom and personal responsibility.

By Ginger Yellow (not verified) on 01 Jun 2006 #permalink

Ahhh....the beauties of rent-seeking.

Wikipedia notes that rent-seeking is "the process by which an individual or firm seeks to gain through manipulation of the economic environment rather than through trade and the production of added wealth. Rent seeking generally implies the extraction of uncompensated value from others without taking actions which improve productivity, such as by imposing regulations or other government decisions harming consumers.

"Rent seeking is often associated with lobbying for economic regulations such as tariffs. For instance, if FooCorp, a domestic producer of widgets, can lobby the legislature to levy a tariff upon widget imports, then FooCorp can sell its widgets at a higher price. If the legislature bans the import of widgets, or effectively bans them through high tariffs, then the additional price extracted can be quite significant. Collusion between firms and the government agencies tasked to regulate them can be a haven for rent-seeking behavior, especially when the government agency must rely on the firms for knowledge about the market."

By David C. Brayton (not verified) on 01 Jun 2006 #permalink

Raging Bee:

I'm generally a winning player, so the more time I spend playing the better I should do. Although the last couple days have been one of those brutal stretches where nothing works at the table. I'm on one of those runs where I'm just getting cold decked no matter what I do. If I have AK and raise it pre-flop, I get called by a smaller ace and then the flop brings an ace plus their smaller kicker. If I have a middle pocket pair and raise pre-flop, the flop comes AKJ and I have to fold. I'm losing virtually every time I go in with an advantage. It's frustrating, but it's also the nature of the game to have stretches like that. Also, I'm not in Washington so the fascist bastards can't arrest me for it.

Ginger Yellow hits an important point. Today's right wing has a social agenda that advocates greater government social control on virtually every issue it tackles: internet gambling, pornography, contraception, abortion, stem cell research, in vitro fertilization, gay marriage, gay adoption, etc. Yet they still and with great hypocrisy rely on a rhetoric that champions individual liberty?! It is long past time that they get called on that.

I'm not a card player but this is beyond ridiculous. What possible negative effects for society can come from someone sitting at home playing games using money they earned and paid taxes on? The state should spend their money on better things, such as cleaning up real crime.

Since they do allow poker rooms, it sounds to me like their objection is not about "morality" (scare quotes because there is nothing immoral about playing games for money), but rather that they don't like gambling that sends money out of the state. Morality is just the justification for economic planning.

Okay, you clearly know the game better than I ever will. Maybe you can win enough money to finance a court challenge?

But if you're not in WA, then on-line gambling is pretty much useless as an act of civil disobedience, innit?

In any case, it's a pretty stupid and corrupt law. Which party is most responsible for it?

Question - why didn't the "Brick & Mortar" lobby spend their money to get online gaming made legal and allow people to gamble through their branded portal? Would that not bring in $ that now sits in jail?

Or is this just a 'play-it-safe' with the morality crowd?

By CheezeBoy (not verified) on 01 Jun 2006 #permalink

The B&M places would have a tough time competing with the major established online rooms, IMO. These major sites (PartyPoker, PokerStars, UltimateBet, etc.) pull in huge $$$ every day. It's a tough market for newer online sites, and it would take a massive amount of marketing to make it worthwhile. It's probably easier to give a couple G's to your local representative and call it a day.

hmm, my last comment didn't get approved, not sure why. Because I don't want to write it all again I'll just say that I think this has more to do with the macroeconomic desire to keep money in the state than it does with morality. Hence the double standard.

But does this really keep money in the state? Assuming (falsely I'm sure) that any $ not spent in an online casino is instead going to a B&M casino, that still doesn't mean the money stays in-state. Many of these casinos (probably all of them that contributed $$$ to the lobby) are run by large corporations that would have little interest to give back to the state of Washington.

You're just slightly off on the horse racing thing... Horse racing is already an established industry in Washington (as are poker rooms, granted), and a number of years ago US-based online horse racing books (which started out as telephone wagering services) opened up with the blessing of state governments. You can bet, for example, via YouBet.com or TVG from here in Michigan on Emerald Downs in Washington. And since a large portion of the takeout (the house's cut) of each wager on Emerald goes to Washington's horse racing industry and (therefore) into the state's economy, it made sense to do two things:

Legalize the ability to play the game conveniently and remotely to maximize revenue, and set up US-based operations that can be tracked, monitored, and restricted (like for Utah residents) at the instructions of the states.

It's not like horse racing barely squeaked out an exemption because of a powerful lobby and greased palms over the last twelve months. It's more that lawmakers understand they'd be taking money from the industry and economy of the state by attempting to shut down this form of online gambling because they want to prohibit something else they don't want to control. It's easier to never let the genie out of the bottle (poker) than to try to put the genie back in (horse racing).

Yes, I know, this all makes no sense to me either.

BG-

But that only argues strongly for doing the opposite of what they did - legalize online gambling in the US so that companies can set up business here, regulate it to insure the game is straight, and tax it.

Welcome to democracy.

Washington, a democracy? I thought that myth was dispelled back in 2004!

Yes, I do love my state.... I've only played free online poker to this point, but the very fact that it's going to be illegal makes me want to put a deposit down on holdempoker.com. At least ours is a state where its relatively easy to get a legislative measure put on the general ballot and voted down.

By Ken Brown (not verified) on 01 Jun 2006 #permalink

Being a fan of online gambling, especially on the horses, I get a little frustrated when online horse books are equated with offshore sports books and poker sites. I agree with you completely that it's hypocritical to draw the line between what's okay and what's not in this case, as poker and horses are fundamentally the same - games of skill with an element of luck in which the house makes a cut of the total dollars bet, but doesn't fix the odds against any single player to their long-term advantage (like in, oh... the lottery?).

It is a little hard, however, for a politician to demonize what is an established industry employing good ol' hard working Americans from the horse owners, breeders, grooms (well, those that aren't illegal immigrants) and the track employees all the way to the guys on the H1B visas keeping the online horse books running - at least it's an American business.

You're right that the solution seems obvious - mass legalization and taxation - but it's apples and oranges comparing online horse betting and online poker. One's US based already in an entrenched industry that supports (ultimately) the American agricultural industry, the other is perceived as a dubiously regulated offshore cabal of greedy bastards introducing gambling action to kids.

And you know it's a hell of a lot easier to tell your constituency you're pro-ag and anti-gambling than it is to support the tax coffer boom legalizing online gambling would bring. Then you're pro-gambling addiction and anti-family.

Moral to the story is that the pols better leave my ponies alone. Saratoga and Del Mar are about to open for the summer.