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Dec. 08, 2008
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JANE ANN MORRISON: Online gambling stories make case for legalizing, regulating and taxing

JANE ANN MORRISON
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When the Washington Post and "60 Minutes" teamed up for news stories portraying online poker players as consumers who need protection from cheats, the impact seemed obvious. The odds of passage of U.S. Rep. Barney Frank's bill legalizing and regulating online gambling became stronger.

Don't take my word for it. Bo Bernhard, director of gambling research at UNLV's International Gaming Institute, said so, too.

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    • We agreed the double-whammy of two national news outlets presenting online poker players as fraud victims strengthens the position of those who want to legalize online gambling ... and tax it. The heart of the Washington Post story was that poker players were cheated out of more than $20 million over four years through scams uncovered at AbsolutePoker.com and UltimateBet.com, two online poker sites. The Washington Post's two-part report ran Nov. 30 and Dec. 1 in the Review-Journal, and the "60 Minutes" segment aired Nov. 30.

    Frank's bill legalizing certain online betting would also repeal the Republican-backed bill from 2006 that put the burden on banks to restrict payments to online wagering sites. Because of the strong opposition to online sports betting by the NCAA, online sports betting probably would not be legalized.

    But with the economy the way it is, taxing online gambling seems like an easy option for a Democratic president and a Democratic House and Senate, all hungry for money to fund programs.

    Bernhard has mixed feelings about legalizing online poker, the most likely form of online betting to be legalized first.

    "I'm torn. I believe in my Nevada soul that a gaming industry that's regulated properly, licensed, subjected to the rigors, is a good thing," said the son of Nevada Gaming Commission Chairman Pete Bernhard. "But I'm also sensitive to the problem gambler and the underage gambler."

    Like many Nevadans, however, his philosophical bent is that people should be allowed to do what they want.

    Bernhard headed the first research project to study Internet gambling by Nevadans, a study requested by the state's Gaming Control Board.

    With all the access to gambling available to Nevadans, why would anyone here want to play poker online? The same reasons folks in other states without casinos gravitate toward online poker: convenience, lower stakes, and speed. Apparently this is a young man's form of recreation, and a young man with more education and more money, the study showed.

    Bernhard found that 3.7 percent of Nevadans in the survey of 1,000 said they played poker online in the last five years, about the same percentage as the rest of the country. Their biggest concern?

    "Nevadans aren't sure of getting a square deal with online poker," Bernhard said.

    The study showed that online poker players were not concerned with the ability of Web sites to cheat them. They trusted the sites (obviously a mistake on their part in the wake of the two cheating operations uncovered). They didn't trust the other players.

    "They were definitely convinced that collusion took place among other gamblers at virtual poker tables," the 2007 study concluded.

    The scam at AbsolutePoker showed that an insider at the company was able to infiltrate the software to discover the other players' hole cards.

    AbsolutePoker refunded cheated players $1.6 million, the Post reported. UltimateBet has refunded more than $6 million and will refund another $15 million, after concluding former employees were able to break into the software to see other players' cards.

    There are legitimate concerns not just about cheating, but about underage gambling, compulsive gambling and the potential for money laundering and organized crime influence if online poker is legalized. However, that certainly seems to be the direction government and the gaming companies are headed. The sympathetic approach of the Washington Post and "60 Minutes" makes it seem like it's practically the government's job to protect poker players.

    But in reality, the casino companies are coming around to the belief that if they can make money through online betting without spending billions to build a property, it may be time to drop their opposition.

    And if it's taxable, that's bound to get government support.

    But the question remains, if the software is so vulnerable that players were cheated of more than $20 million, can government regulation really protect the online bettor?

    Jane Ann Morrison's column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call (702) 383-0275. She also blogs at lvrj.com/blogs/morrison.

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    Mike wrote on December 10, 2008 02:42 AM: I think that the US government is wrong by banning online gambling especially in these times when there are so many more important pressing issues to solve.


    aaron wrote on December 08, 2008 07:07 PM: Certain sites have earned out trust. I'd trust Pokerstars before Harrah's. They do what they say, and say what they do. I would love to see Wynn and Pokerstars team up.

    All you right wingers, look up the UIGEA, and the circumstances under which it passed. It is the religious right that wants to curtail personal freedom.


    Johnathan L. Abbinett wrote on December 08, 2008 06:03 PM: Dear "Judy" you know you're right and you have to remember that the radical, right-wing, neo-con, nut-cases are never, ever going to take responsibility for anything - they are SOCIOPATHS!



    So, don't waste your time or talent on trying to explain things to the stupid - they don't get it because they don't care to get it - that's why they spell stupid S-T-O-O-P-U-D!



    One of these idiots actually had the arrogance to blame JFK and LBJ for Vietnam but absolutely insisted that GWB was NOT responsible in any way, shape or form for Iraq!



    Judy, they're delusional - as they say, it's best not to get into a mud fight with a pig - the pig will love it, but you'll jus get frustrated!


    Johnathan L. Abbinett wrote on December 08, 2008 06:03 PM: Dear "Judy" you know you're right and you have to remember that the radical, right-wing, neo-con, nut-cases are never, ever going to take responsibility for anything - they are SOCIOPATHS!

    So, don't waste your time or talent on trying to explain things to the stupid - they don't get it because they don't care to get it - that's why they spell stupid S-T-O-O-P-U-D!

    One of these idiots actually had the arrogance to blame JFK and LBJ for Vietnam but absolutely insisted that GWB was NOT responsible in any way, shape or form for Iraq!

    Judy, they're delusional - as they say, it's best not to get into a mud fight with a pig - the pig will love it, but you'll jus get frustrated!


    Judy wrote on December 08, 2008 03:41 PM: Steve,
    Seems to me that the right win conserrvative in the White House is the one who banned online poker.
    Bush tied it into the Homeland Security bill that took away a lot of our rights, gets into our personal business, taps our phones, listens in on service members telephone calls, etc. Gosh, the right wing isn't into our business? Right. That's why the US has gone blue.


    ex gambler wrote on December 08, 2008 02:08 PM: I think any intelligent player would know the caveat...'buyer beware.' Unfortunatley, most who gamble online are compulisive gamblers, the very ones who need protection....from themselves.


    Steve wrote on December 08, 2008 01:23 PM: Judy,

    Don't try blaming "right wing nuts" and Republicans for your extreme left-wing radical liberal views. It has been and always will be the liberal who stick "their noses where they don't belong...". It is you lefties who tell everyone where and if they can smoke, drink, etc. It is you lefty weirdos who passed a law in Florida that the government can come into your home and fine you for not keeping it clean, etc. Remember, as Abraham Lincoln is credited with saying: "It is better remain siletn and be thought a fool than to speak out and remove all doubt". However, I think after you post below, it's too late for you.


    Jim Nance wrote on December 08, 2008 12:57 PM: There are other ways to cheat, too.

    A person can play more than one hand at a table or a group can get together and plan hands and talk/chat with other.

    They will have a big advantage over other players.

    If one player has the nuts then the other plays can bet to induce other playes to bet,too.

    Also, the team knows the odds better. If I have KK, team player 1 has A 3 and team player 2 has A 9 then KK knows his hand has a better chance to win.


    Right Wing Nut wrote on December 08, 2008 09:40 AM: Judy said "so Eric wants to tell people how to spend their money! Must be a right-wing nut...". Actually, trying to use govenment to tell people how to spend their money sounds more like a flaming liberal than a "right-wing nut." I for one support the right of people to gamble online or do anything else they want to do as long as it doesn't infringe on the rights of others. Is that "right wing nutty" enough for you Judy?


    me wrote on December 08, 2008 09:39 AM: There are also many other stories of proven cheating that didn't make the papers. Poker Room even refused to stop cheating it was alerted to in the main offices of their sub skin sites.


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