It’s an argument that seems to have some popular support in Techcrunch and Reddit.
Crazy but true…
In fact, this is a big part of why the government is trying to do such a good job. “In a recent hearing, Senator Markey asked a question about “the issue of online gambling”, which was directed to David Segal, a former Vice President (then General Counsel, now Chairman of the Interactive Gaming and Digital Media Committee). Segal was asked how he would handle “the issue of online gambling”. Segal responded (emphasis added): “Well, what I would do in a situation where I was not an attorney but had had some experience in the area, is, I would say, it would be an open line of communication with the regulators.” Segal went on to explain how, “The best way to deal with online gambling activities is actually to talk to the regulators. And if you can do that, there’s probably not too much bad that can come of it.” “I think when you do know what you’re talking about, you can also do it,” added Segal.
It certainly seems like they could probably avoid a lot of bad outcomes if they just talked to the regulators, right? The question is, “Is it worth the hassle?”
From our own conversations, we can see two big problems with this approach. First, if it’s worth the hassle and the risk to the companies doing the dealing as a result of these games being allowed to exist in the first place (or the regulations covering such activities being relaxed), then why not just accept that if there’s not a huge profit to be made by selling cards, they’ll go away eventually? Second, these rules aren’t just about making money for the companies that own and run the casinos and the poker rooms and poker sites; it’s about protecting consumers. What if you get caught playing something, and the company can have the money that the gambling card was bought from in a small settlement paid to them? In fact, that’s exactly what happened in this case where the online card room that operated some of the other sites got caught doing it (albeit with a very small fine from the judge, who made an interesting point about how these casinos are only being sanctioned now because of the negative publicity they’ve received in the past:
Here’s the transcript of that proceeding (from the hearing itself), and the key details are:
A representative for the judge expressed to the plaintiffs how she thought that the way in which such sites operate “would really undermine the ability of the court to manage them properly.”
A member of the plaintiff’s general counsel told the court how she thought that the companies operating online gaming sites aren’t really all that careful where they get their cards or other electronic product. According to the general counsel, all three sites that were the subject of the hearing “were operated by people who only sold electronic products. It’s not that there’s anything dishonest or illegal about that. But it’s how do you keep a track of who is going to be using a certain product in order to get the best price and the best services. And if you are going to have multiple sites, it’s much harder to come together in a single entity when it comes to that.” It is hard to see how all of the companies participating in the online gaming market could possibly function that way right now - not to mention how this decision could actually be an incentive to the players and websites to try to find other ways to keep a better track of who was using a particular card or product. (See the full transcript here .)
And while we’re on the subject of the law, Judge Posner, perhaps as a response to the argument from the General Counsel, noted this: This case has many similarities to another case that occurred a few years ago in Japan, “Tawaguchi v. Tawaga”, which was about the requirement of “fairness of competition” for the companies who operated various card networks. While at the trial, there was plenty of evidence in the record in support of the plaintiffs, the presiding judge rejected a claim of “fairness of competition”, and instead said the law that imposed such a duty “would be an illegal ban of monopoly as it would require more competition among the card players than there is to guarantee a free and fair marketplace for consumers, and indeed would be a net gain to the monopolist of power in this free and democratic society.” (This case was later found to be unconstitutional.) As a whole, the arguments made by the judge were very thorough and convincing, though admittedly, while you would certainly disagree with some of them, it would seem at the very least that the court does not think this is unconstitutional or in danger of being so.
In other words, from our understanding from the hearing, this issue is not nearly so simple and in fact, that’s part of the reason the judge is not going to rule in one breath, and then immediately make the decision the right way. She gave