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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. Most gambling is informal among friends, as in weekly poker games or in office pools focused on a sports championship.

However the gaming industry is a major tourist-oriented business in Nevada. In recent decades casino gambling has been legalized in many states, in come cases in narrowly specified locales (such as riverboats) or on Indian reservations (which are less subject to state law.)

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.


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.


In games played against the "house" (for example, in a casino), typically the players will have an expected return of less than 100%. For example, in roulette, in the case of a 0 or 00 result, the money bet goes to the casino. 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."[1]

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.[2]

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

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[3]. 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[4] of a planned visit to Washington D.C. by a pro-Internet gambling rights group Casino Gambling Web[5]. According to the alert, Casino Gambling Web has collected nearly 5,000 American signatures on their Repeal the Internet Gambling Ban petition, at, and will take this to Washington in July 2007.

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 [6]. 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." [7] 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." [8]

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 o n 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.’” [9] A gambling loss limit provides the regulation necessary to prevent such harmful and illegal money laundering from organized crime syndicates and terrorists alike.


  2. Id.