This was the "Question of the Day" for December 17, 2006 on the Las Vegas Advisor website.
http://www.lasvegasadvisor.com
Q:
Now that the online gambling prohibition is the law of the land, maybe you could give us your opinion about it. What do you think of it? What impact do you think it will have?
A:
For this answer, we turned to the senior editor of Huntington Press, Deke Castleman, who tends to take a libertarian view of issues that have to do with personal choice, victimless crime, unenforceable laws, and government-imposed morality, all of which the Unlawful Internet Gambling Enforcement Act of 2006 encompasses to one extent or another. His opinion doesn't necessarily reflect those of company management.
Right off the bat, let me say that I believe this bill, and the circumstances surrounding its "passage," to be politics at its worst (and that's bad). Anyone with an ounce of sense knows that this prohibition -- sneaked into law as an addendum to an act that attempts to protect 361 U.S. seaports from potential terrorist threats, approved by committee and sent to the president without a formal vote or even a debate, so early in the morning just before a five-week recess that most legislators weren't even there for its approval and possibly didn't know it was happening and certainly never read the text -- was nothing more than Republican politicians pandering to their constituency in order to win a few votes in the upcoming election.
Foregoing a background discussion of the purpose of government, which -- as any first-year civics student should know, and barely one in more than 500 federal legislators remembers, if they ever knew it in the first place -- is to protect the rights of its citizens, the Unlawful Internet Gambling Enforcement Act of 2006 purely and simply is an attempt to block what a handful of holier-than-thou so-called authorities consider a weakness in character of 25-million-plus American online-gambling enthusiasts.
Forget that 55 million Americans frolic in carpeted and chandeliered casinos every year. Forget that state lotteries, horse racing, and fantasy football, among other forms of wagering, are exempt. Forget that even the bill's sponsors could muster only the usual claptrap about gambling hurting families, destroying lives, and, of course, threatening Ch*ldren (latter-day moralists are always beating their self-righteous breasts about "the chillllllldren"), in their lame and transparent attempts to justify banning the particular recreational pleasure that prompts one to sit down at one's computer in one's spare time and play a little poker or place a sports bet or two.
Meanwhile, the law puts the onus of its enforcement on private-sector financial institutions, Internet service providers, and even search engines (compelling businesses to do the government's dirty work is a fundamental tenet of fascism). Worse yet, it imposes stiff fines and prison time on the bankers, et al., for failing to enforce the law when, ironically, the law is unenforceable.
Here are a few possible reasons why it's unenforceable.
First, it would be nasty PR, presumably, though illustrative of the way power-mad people think and act, for Treasury agents to be shown over and over in video clips on Headline News kicking down the front doors of the CEOs of Bank of America, Citibank, and Chase in the middle of the night, rousting them from their beds, handcuffing them behind their backs, and arresting them in their pajamas -- the way many white-collar "criminals" are handled these days -- on charges of "failing to identify and block prohibited financial transactions."
Besides, blocking said transactions might be impossible to begin with. According to the Wall Street Journal, in 2004, 45 billion uncoded transactions were processed by financial institutions in the United States. (An uncoded transaction is one that doesn't indicate the type of business receiving a payment. Credit-card companies code their transactions -- for example, VISA's 7995 classification for online gambling, which it blocks.) However, electronic-check clearing and electronic-fund transfering are uncoded processes. So, in order for financial institutions to enforce this law, a "massive overhaul of the entire payment system," in the WSJ's words, would have to be implemented, creating an "impossible compliance burden."
Furthermore, the U.S. Department of Justice has no jurisdiction over offshore payment processors, such as NeTeller, FirePay, Click2Pay, and ePassporte. Will American banks start blocking all transactions to online payment processors under the assumption that at least some of them are headed for gambling Web sites? Will banks block transfers to Americans' offshore bank accounts under the same assumption? (Doubtful. Watch out, however, for the new Democratic Congress, which, it looks like, is gearing up to heavily restrict offshore banking and investments and impose even more massive reporting of all offshore financial activity. But I digress.)
Actually, I believe this law is unenforceable even if most Americans play along with it and stop trying to transfer money into online gambling accounts (from what I can tell so far, it's business as usual for Americans who gamble online; the deadline for the enforcement process doesn't kick in till July 2007).
But what if all people -- gamblers and non-gamblers alike -- concerned with the erosion of freedoms start to actively resist this law? What if they deliberately, and with malice aforethought, begin attempting to transfer funds into the prohibited businesses? That's not illegal, after all. And they don't even have to gamble with it; they just transfer a little money -- twenty dollars, ten dollars, five dollars -- in and out. What if, all of a sudden, the banking industry is overwhelmed by, for example, 25 million people making billions and billions more uncoded transactions that are now required to be flagged and denied? Think of the splendid chaos! Ultimately, the banks would have no choice but to throw up their hands and claim that Congress might as well pass a law dictating that they do away with gravity.
In fact, the more blatant the effort to tie the banks into knots the better. Let the world know that this is a movement of resistance, that this is what happens when the people object to government interference in their lives, livelihoods, and recreational pleasures. It's known as civil disobedience. The banks are forced to spend so much time identifying and blocking transactions with Internet sites that they simply give up trying to comply, if they ever start. And if the government is foolish enough to bring charges against them, the banks insist on going to criminal court, where jury after jury refuses to convict (this famously happened with the Fugitive Slave Act -- and more recently with marijuana crimes). Prosecutors have no choice but to give up pursuing enforcement. T-men no longer bother investigating. The politicians, finally (they're always last to get the news), give up on their latest stupidity.
If the Unlawful Internet Gambling Enforcement Act of 2006 doesn't tuck its tail like the bad dog it is and go away, I say take it behind the barn and shoot it. Tie up the banks. Inundate them. Overwhelm them with transactions that they're supposed to identify and block. Force the government to either arrest, jail, and put the banks' compliance personnel on trial or give up the ghost of a political farce. See how fast this nonsense goes away.
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