The UIGEA did not actually make internet gambling illegal.  Instead, it made it illegal for financial institutions to knowingly process money transfers for online gambling.  Although a few poker sites left the US market at the time, and there have been various hiccups in the processing of deposits and withdrawals from player’s accounts, the UIGEA for the most part had been a non-issue. Poker sites, especially Full Tilt, always found a workaround.  They had set up tons of shell entities to make it appear as though player transactions were being processed for non-gambling goods and services.  So, strictly speaking, the websites are in violation of the UIGEA.  We can’t dismiss that they have been breaking the law.  But with billions of dollars at stake, they understandably took the risk.  Since players themselves were not at legal risk, the system worked just fine.  Until Friday. Then the owners of the websites were charged with a lot of violations of the UIGEA, including money laundering.

Freedom-loving individuals can thank Republicans Rep. Jim Leach, Rep. Robert Goodlatte, Sen. Bill Frist, and Sen. John Kyl for playing nanny-staters to thousands of online gamblers.  However, you can also thank 409 members of the House and every single member of the Senate for passing the bill.  Then again, it was attached to the Safe Port Act – yielding yet another reason why procedure needs to change to forestall the attachment of amendments that have nothing to do with the bills they are attached to.

We usually expect Democrats to place restrictions on our freedom, yet there is this curious sect of Republicans that somehow feel they can legislate morality.   But even the moral argument for the bill makes no sense.  In fact, the moral hypocrisy of the bill is beyond outrageous.  The authors of the bill did nothing about state lotteries – a sad, sick method of regressive taxation that has been proven to harm the poor.  Yet this practice always gets a pass because of the revenue it generates for each of the states.   This made the bill’s passage all the more mystifying.  Why not tax gambling revenues instead and legalize the gaming?

The motivation for the bill literally makes no sense.  As my old math teacher, a devotee of Lewis Carroll, once said, “Worthy of a trip down the rabbit hole!”. Then again, since when does government make sense?

Online gambling, like the lottery, is a choice.  At least with gambling, one actually has a chance at winning.  Winning the lottery, on the other hand, is a miracle.  And with poker, the argument over whether it is a game of chance, skill or both is ongoing.  Professional poker player Annie Duke insists that it’s a game of skill.  Freakonomics author Stephen Dubner says otherwise.

Frankly, it doesn’t matter.  The point is that engaging in any of these activities is a matter of personal choice.

Furthermore, the legality of gambling is a state issue.  Why are the Feds involved?  And what about these Republicans that are involved?  What drove them to slap this bill in there?  For Heaven’s Sake, the mere thought that Barney Frank – yes, THAT Barney Frank — has tried to strip out the UIGEA from the Safe Port Act for several years reminds us never to judge any given politician.   It’s always possible that the Bizarro World Wormhole can plunge us into an alternative universe when we least expect it.

Some wish for America to try a new prohibition – with Internet poker the target of misguided efforts.  Laws like the Unlawful Internet Gambling Enforcement Act (UIGEA) have made Americans less free in their own homes, but have not stopped Americans from playing poker.  Like Prohibition, however, the policies of this prohibition are fundamentally flawed and pose a threat to safety.

Prohibition advocates of the early twentieth century sought to eliminate what they believed to be a negative attribute of society.  However, regardless of one’s view on alcohol consumption or Internet poker, it is undeniable that Americans will seek out ways to continue proscribed activities. It is unrealistic to expect otherwise.  As a nation founded on liberty, it’s in our DNA.

Prohibition demonstrated the detrimental effects bans can have.  Hazardous forms of alcohol were ingested, jails became overrun, and dangerous entities like organized crime became involved in transactions.  The rigid UIGEA requirements could foster a similar environment in the realm of gaming.  In addition, this prohibition would do nothing to protect those who are most vulnerable – underage participants and those with excessive gaming habits.  Today’s Internet poker players are a diverse, ever-expanding body from all walks of life.  Overindulgence is an unfortunate reality for a small subset of the gaming world, yet this tendency can be seen in areas all across society.  To single out Internet poker is an affront to consumer interest and ignores sensible solutions that can be met through technology and oversight.

Earlier this week, Wired Safety, a leading non-profit organization dedicated to Internet safety, released a study by Professor Malcolm K. Sparrow of Harvard University showing that licensing and regulating online poker is the most effective way to protect underage participants and those with excessive gaming habits.  Without the ability to license and regulate, there is simply no way for government to enforce laws and provide active oversight over an industry that will exist, with or without their approval.

If a lesson can be learned from the repeal of Prohibition in 1933 and the subsequent years of effective regulation, it is that there is ample room for compromise.  The United States owes it to its citizens not to provide a system that does more harm than good by forcing industries underground.   The country also owes it to itself to capitalize on this opportunity for billions of dollars in revenue, especially in the current economic climate.

Bills recently introduced into both the House (H.R. 2267, the Internet Gambling Regulation, Consumer Protection and Enforcement Act) and the Senate (S. 1597, the Internet Poker and Games of Skill Regulation, Consumer Protection, and Enforcement Act) echo the public voice in enacting responsible licensing of Internet poker that promotes transparency, accountability and protection above all else.  History must not repeat itself, and there is no time more advantageous for new precedents to be set than the present.

Poker is not a crime, nor should it be.  Millions of Americans – including the president and many in Congress – play the game at their kitchen tables, on the Internet, and at their local card rooms.  It is a great American pastime.  During that failed era of big government “conservatism”, however, some big government social conservative groups like Focus on the Family wished to use the power of the federal government to stop Americans from playing online poker in their own homes.

To bolster their position, some of these big government social conservative groups falsely reported the results of gaming studies, leading to Rep. Spencer Bachus (R-AL) erroneously claiming on the floor of the House that one-third of college students who tried online gaming had attempted suicide.  These groups also took studies on video slot machines that display jackpot near-misses in excess of the actual frequency of near-misses (the “crack cocaine of gambling,” according to Focus on the Family), falsely stated that the study results are applicable to all games on a video screen, then egregiously stated that even online peer-to-peer games of skill like poker are somehow included in the mix.

In a classic “be careful of what you wish for, you just might get it” scenario, the Unlawful Internet Gambling Enforcement Act (UIGEA) was passed into law in 2006 after being sneaked into the unrelated Safe Ports Act in the middle of the night by GOP leadership.   The new law banned U.S. financial institutions from processing transactions with sites hosting Internet gaming unlawful under other laws.  Fortunately, despite the best efforts of some anti-poker politicians, no federal law makes Internet poker unlawful, so poker is still not a crime.  Some have suggested that the Wire Act includes poker, but the U.S. Fifth Circuit Court of Appeals ruled in 2001 that the Wire Act is limited to sports betting.  Unfortunately, the Justice Department does not accept that ruling and UIGEA does not define what is legal and what is not.  This legal limbo comes into full effect in December of this year when enforcement is set to go into effect, and poker players have already been affected.

In June, right before the World Series of Poker and in the midst of a recession with bailout dollars pumping through the economy, the Southern District of New York authorized the seizure of more than $30 million that rightfully belonged to poker players.  These were not just winnings, either.  These were players’ own personal funds placed in U.S. accounts.  The government simply seized it and refused to explain the reasons behind the seizure.

UIGEA opened a can of worms for the Republican Party.  Many Americans, particularly younger swing voters, adamantly oppose Internet censorship.  They developed a strongly negative view of the big government nanny-state instincts of the “new” GOP.  Banks and other financial institutions were equally outraged at being deputized as the unpaid Internet poker police.  Former Republican Congressman (and current pro-Obama turncoat) Jim Leach of Iowa, the sponsor of the legislation, was also its first casualty, losing his reelection bid to Democrat Dave Loebsack that same year.

Poker players responded to attacks on their liberty by forming the Poker Players Alliance, a one-million member strong grassroots organization that fights to protect the rights of poker players.  The drafters of the 2008 Republican Party Platform got the message.  After receiving many letters and online comments from poker enthusiasts, the draft committee kept online poker prohibition language out of the platform, stating a desire not to lose these voters in what was shaping up to be a difficult election year.  Unfortunately, the full committee chose to restore it.  Reaction was swift.  Reason magazine ridiculed the party for inserting this advocacy of big government into their platform, and GOP presidential nominee John McCain received tens of thousands of letters and phone calls in protest of this platform plank.  Many more protests were, as predicted, delivered via the voting booth on Election Day.

One wonders why a rather small but loud minority of the social conservative movement has this knee-jerk reaction against poker.  It seems they see this as a special area that requires big government limitations of our liberties for our own good.  Surely this is the type of area where truly principled conservatives would be expected simply to decline to participate in poker if they did not like the activity, much as we do with smoking and other activities of personal choice.  And, in fact, many do oppose this.  Former House Majority Leader D.  Armey, George Will, Grover Norquist, Walter Williams, and other leading conservatives have come out in strong opposition to what Will calls “Prohibition II.”

Perhaps the inclusion of poker prohibition advocacy into some descriptions of conservatism is an anachronistic holdover from the beliefs of the Temperance Movement of the early 1900s, when too many social conservatives (unfortunately) started seeing value in using the power of the federal government.  It is definitely an idea whose time has passed.  Opponents of online poker should reconsider their desire to restrict liberty out of unfounded fear.  We need less government in our lives, not more.

Attacks on online poker represent unnecessarily heavy-handed attempts to control legal activities, and go further than any other government action to censor the Internet.  Fortunately, there are encouraging signs.  The PPA participated at the Conservative Political Action Conference (CPAC) this year, and the Washington Times reported that reception was very positive.  Far from believing Americans need the big federal government to protect them from themselves, the CPAC attendees overwhelmingly supported keeping the federal government out of our lives to the maximum degree possible.  They were also very opposed to government censorship of the Internet.  Additionally, many CPAC speakers loudly advocated small government principles.

Thankfully, a bipartisan group of freedom loving politicians in both the House and the Senate are fighting for legislation that will protect consumers and Internet freedom.  Licensing and regulation will also bring poker sites to the U.S., bringing tax revenue and jobs with them.

The nation simply does not want a federal censorship board monitoring the Internet, and the GOP cannot afford to give away votes.  It is time for conservatives to take over the party, adopt limited government values, and win some elections.