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a terrible bet

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Bad legislation may be especially common during an election year, but the Internet Gambling Prohibition and Enforcement Act — passed 317-93 last month by the House — is in a class by itself. The bill is simultaneously impractical, hypocritical and just plain confused.

The measure would clarify the 1961 Federal Wire Act by banning the use of credit or debit cards to set up accounts with online firms taking wagers on sports, poker and other games. Banks would be pressured to play detective to make sure their customers weren’t funding accounts through third parties. Authorities would be empowered to block access to foreign-based Web gambling sites.

Sponsors say Congress must act because never before has it been so easy to lose so much money so quickly at such a young age. Many cite stories about college students running up debt to rival their student loans.

But the problem is that online gambling — an estimated 8 million Americans wager $6 billion a year — is such a mass phenomenon worldwide that banning it in the United States is akin to enacting prohibition in a dry county when a wet county can still deliver booze to your door. While the focus has been on Caribbean-based operations, more than 85 nations allow Internet gambling, including Britain, France and Germany. Unless there is a massive enforcement apparatus to block the access of millions of Americans to thousands of legal businesses from around the world, there is no way to keep Americans from gambling via the Inter-net. It is also worth noting that international trade pacts ban such an approach.

Meanwhile, given that 48 of 50 states allow forms of gambling and that Congress passed a law blessing online betting on horse races, moral objections to online wagering seem profoundly silly. So lotteries and betting in which the government gets a big cut are morally acceptable, but not other types of gambling? The twist here is that the alternative approach touted by most critics of the House bill — having the government license, regulate and tax Web sites that seek U.S. bettors — would be far more effective than an unenforceable prohibition in identifying both underage and problem gamblers. Online firms would have to obtain proof of age, not just accept credit card numbers, and audits could single out those who need counseling.

Last year, Britain looked at precisely these issues — as well as rogue betting sites’ involvement in money-laundering — and decided legalizing and regulating online gambling was the logical way to temper its risks. Unfortunately, such a thoughtful approach appears beyond U.S. lawmakers. It’s election year — so problems are to be exploited, not addressed

Entry #669

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