Gambling

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Gambling consists of betting on games of chance or uncertain outcomes (like the winner of a sports match or an election). Sometimes the game entails some skill as an attraction, as in poker. Gambling addiction has a devastatingly harmful effect on society and families affected by it. Gambling often harms families that can least afford it.

Gambling is a way that government and businesses take money from the poor. Twice in our nation's history gambling was legalized in a widespread manner, and then prohibited. We are currently in a third phase of the legalization of gambling, first in Las Vegas and Atlantic City (which have both declined in recent years), and then on riverboats and Indian reservations, and now in many locations in some states. Gambling is still mostly prohibited in many conservative states, such as Texas, except for government-sponsored gambling in the form of a state lottery.

Lotteries are a common form of gambling, with a small stake being bet for the very low probability of winning a very large amount of money, if the numbers a player chooses are selected by a random number picking device. Lotteries are a major revenue source for governments. In just one multi-state lottery in early 2012, there was about $1.5 billion wasted on the "Mega Millions" lottery - money that could have been put to far better use.[1]

Addiction

A certain fraction of the population is addicted to gambling and tend to drain family resources on the habit. Stories are common of addicts losing all their money in a single gambling spree. Only Missouri has a gambling loss limit.

Odds

In games played against the "house" (for example, in a casino), typically the players will have an expected return of less than 100%. In games against other players (such as poker), the expected return might be 100%, when the players are of equal skill levels (assuming the order of dealing is not important), or certain players might have greater (or lesser) expected returns, if they are better (or worse) players. If all the money stays with the players, then the overall expected return is 100%. If the "house" takes a rake of the money bet, the overall expected return will be less than 100%.

Legality of Gambling

Several times in American history gambling has gone from being illegal, to being legal in many areas, to becoming illegal again. Gambling is typically regulated at the state and local levels, but Congress passed a bill prohibiting internet gambling in 2006.

In 2005, the World Trade Organization (WTO) ruled that "the U.S. had failed to comply with a 2005 final WTO order to change certain laws related to a successful challenge by Antigua of the U.S. ban on Internet gambling. The WTO GATS agreement allows nations to 'take back' service sectors from WTO jurisdiction, but only after compensating trading partners for lost business opportunities."[2]

In response to a request by more than half the states, in 2007 President George W. Bush withdrew the United States gambling sector from jurisdiction under the World Trade Organization, in anticipation of further demands or sanctions by the WTO against American regulation of gambling.[3]

Following passage of UIGEA, former U.S. Senator Al D'Amato (R-NY) joined the Poker Players Alliance (PPA) to lobby for the right of poker players to play online.

In Wisconsin, it is illegal to vote in an election if one has wagered on the outcome, even if the bet was made legally.

In the United Kingdom, gambling on all kinds of events is legal, although sportsmen should not bet on the outcomes of contests in which they are involved.

Internet gambling

On April 26, 2007, Rep. Barney Frank (D-MA) introduced HR 2046, the Internet Gambling Regulation and Enforcement Act (IGREA). The IGREA would modify the UIGEA by providing a provision for licensing of Internet gambling facilities by the Director of the Financial Crimes Enforcement Network. On June 8, 2007, the House Financial Services Committee, chaired by Rep. Frank, held a hearing entitled, "Can Internet Gambling Be Effectively Regulated to Protect Consumers and the Payments System?". Details of the meeting, including the archived webcast, are available on the House Financial Services Committee website[4]. Expert witnesses at the hearing testified that Internet gambling can be effectively regulated for age verification, money laundering issues, facilitation of state and federal tax collection, and for issues relating to compulsive gambling.

On June 7, 2007, Rep. Robert Wexler (D-FL) introduced HR 2610, the Skill Game Protection Act. This act would legalize Internet poker, bridge, mah jong and other games of skill. Also on June 7, 2007, Rep. Jim McDermott (D-WA) introduced H.R. 2607, the Internet Gambling Tax Act. The IGTA would legislate Internet gambling tax collection requirements.

On June 29, 2007, Focus on the Family issued an alert warning[5] of a planned visit to Washington D.C. by a pro-Internet gambling rights group Casino Gambling Web[6]. According to the alert, Casino Gambling Web has collected nearly 5,000 American signatures on their Repeal the Internet Gambling Ban petition, at www.thepetitionsite.com/petition/306149419, and will take this to Washington in July 2007.

Legalized Internet gambling has been made available in New Jersey since November 2013.[7] Gamblers physically located in New Jersey can place bets on websites run by Atlantic City casinos.[8]

Gambling Loss Limit

The Missouri legislature, with the approval of voters, adopted a gambling loss limit in an effort to prevent substantial losses by gambling patrons. The loss limit allows for a loss of no more than $500 every two hours, or $6000 per day. This loss limit does not limit recreational gambling but does clearly help reduce the impact felt from pathological and problem gamblers as well as help prevent illegal money laundering.

Those individuals who would gamble and lose more that $500 ever two hours are most likely to be the pathological and problem gambler. Those individuals are the least able to control their gambling and are the most responsible for the social cost that result from gambling [9]. This loss limit helps to reduce binge gambling because “many problem gamblers have binge activity extending over long hours. If casinos would have closing hours, (or loss limits) even if only for two to four hours an evening, such binge behavior could be temporarily stopped, and a problem gambler could be brought back to reality." [10] In fact, “removing loss limits at gambling establishments will lead to an increase in compulsive gambling and an escalation of the gambling by those individuals in the early throes of addiction." [11]

The $500 loss limit also significantly deters the use of casinos as a means for illegally laundering large sums of money. “The federal government is currently expanding regulation necessary to limit money laundering by drug cartels and terrorist organizations. The federal government has found that existing federal regulation of, and reporting requirements for, casino transactions are not sufficient to limit or reduce money laundering and that additional regulation is needed. News reports indicate that terrorists were using casinos (including Missouri casinos) in the course of the recent terrorist attacks. Thus, in this climate, it is not a time to loosen the regulations on casinos but a time to -- as the federal government is doing -- consider additional money laundering regulations for casinos and other gambling enterprises. An investigation by the United States General Accounting Office concluded that, ‘As the amount of money wagered annually has increased, casinos may have become more vulnerable to individuals who attempt to launder their illegal profits in the fast-paced environment of casino gaming.’” [12] A gambling loss limit provides the regulation necessary to prevent such harmful and illegal money laundering from organized crime syndicates and terrorists alike.

References

  1. http://www.jacksonsun.com/article/20120331/NEWS/303310014/Americans-spend-1-5B-Mega-Millions-tickets?odyssey=mod%7Cmostview
  2. http://www.allamericanpatriots.com/
  3. Id.
  4. http://www.house.gov/apps/list/hearing/financialsvcs_dem/ht060807.shtml
  5. http://www.citizenlink.org/FOSI/gambling/cog/A000004244.cfm
  6. http://www.casinogamblingweb.com/gambling-news/gambling-law/an_internet_gambling_education_for_anti_online_gambling_groups_46698.html
  7. http://nypost.com/2014/05/19/illegal-sites-hurting-new-jersey-online-gambling/
  8. http://www.nj.gov/oag/ge/gamingsites.html
  9. http://www.casinowatch.org
  10. http://www.casinowatch.org/loss_limit/briefing_points.html
  11. http://www.casinowatch.org/loss_limit/lorenz_letter.html
  12. http://www.casinowatch.org/terrorists/money_laundering.html