Why Obama Needs to Help Tax and Regulate Online Gaming Now

by Lou on September 6, 2009

With bills to regulate online gaming and eliminate UIGEA introduced in both the House and the Senate, most people are feeling optimistic about overturning it sometime during this legislative session. While I hope I’m wrong, I’m not one of them.

I don’t think either of these bills will come out of Congress in 2009 for a number of reasons.

Congress Doesn’t Care: They’re consumed with issues related to our national economic doldrums, a war in Afghanistan and another in Iraq, and health care bill that has done nothing so far but pull down congressional and presidential approval ratings. Consequently, your elected leaders are not paying attention to other issues. Simply put, legislation to overturn UIGEA just isn’t high on their radar screen.

Regulating Online Gaming is Not a Political Winner: Elected officials need to keep getting elected, which is why they tend to avoid confrontational issues—and they especially don’t like taking sides when regardless of which side they support, they’re bound to anger, polarize, and help mobilize the other. Face it, for every ardent supporter of civil liberties, for everyone who realizes that Congress should not dictate to us what we can and cannot do with our own money in the privacy of our own homes as long as we’re not hurting anyone else in the process, there’s another voter somewhere in that legislator’s district who believes that gambling is sinful, and government needs to protect us against ourselves.

It doesn’t matter that nanny-state politics is bad public policy and wrong headed. What matters is counting votes. When confronting as potentially divisive an issue as online gaming, an elected official figures to lose more votes than he’s likely to gain, regardless of where he stands on the issue. Support it or oppose it—when votes are tallied-up, it’s heads you lose, tails you lose!

But What About the Money? One of the strongest arguments about regulating and taxing online gaming is the promise of reclaiming revenue now lost to the US government. And that’s revenue we can use now, can’t we? It’s hard to argue against that, but it’s only one side of a strongly psychological coin.

If our national revenue gap were such that it could be closed, or even significantly mitigated by revenues from online gaming (according to estimates I’ve read, we’re talking maybe $12 billion here), I believe we’d have a law on the books that would tax and regulate online gaming in a New York minute. But when we’re discussing a budget deficit in trillions, we’ve long since passed the misery index, and closing it by a billion here or a billion there—or even one hundred billion—won’t really cause a visible dent.

In other words, even if you and I and everyone else in America played online poker 24/7 for the next year—never sleeping and never eating, just multitabling day and night—we would not generate enough rake that would in turn yield enough in tax revenues to make a dent in our national debt. It would be like Bernie Madoff trying to pay back everyone he swindled with whatever he happens to have in his checking account right now.

Is There a Solution? But there is a ray of hope in all this. What online gaming needs now, more than ever, is a passionate salesman as its hero. We have that salesman, and he’s in dire need of a winning product.

Who is that salesman? It’s Barack Obama. Of course. He a proven master at lining up support behind him. But lately his ratings have been sinking faster than a stone. Regardless of how he spins the congressional health care plan, it backfires on him. Now he’s even going back to the drawing board to craft his own version of the plan, tweaking it to reflect the criticism the current plan has received from seemingly all sides and to give the soon-to-be-announced new plan his personal leverage, which is certainly stronger than any support Harry Reid and Nancy Pelosi can engender.

In poker terms, Obama is on a cooler right now. The economy stinks. His health care legislation—upon which he pinned much of his personal credibility—is dead. The wars aren’t going well, and while he inherited those twin albatrosses from his predecessor, the weight is firmly around his neck right now. The political fallout from aligning himself with such reprehensible characters as Van Jones hasn’t helped either.

Our president is in dire need of a winning hand, and I believe that handled properly, online gaming could be an issue that helps him accumulate chips. More than anybody else, President Obama could sell the American people on the merits of a bill similar to those introduced by Congressman Barney Frank and Senator Robert Menendez. If he does this, he will painlessly raise tax revenues and have at least one needed winner on his resume in the process.

Obama’s popularity is in decline and regardless of whatever other initiatives he might bring forth in the near future, the only one promising to generate revenue is regulated online gaming. All of the others will cost money, and we can’t afford it. The only other way to generate revenue is to raise taxes and it’s pretty clear that America is fed up with the idea of coughing up trillions of hard earned dollars to fund a trainload of debt that’s cascading out of control down an endless track.

Show Some Leadership, Mr. President: Get behind a bill to tax and regulate online gaming. You know that we will tax and regulate online gaming eventually. I’m thinking that it will happen soon, but not before 2010 or 2011. But you can prove me wrong, Mr. President. Instead of following this trend, you can get out ahead of the parade and lead it, and I hope you do.

Beat the drum for the Frank and Menendez bills. Do it now. You’ll raise some revenue. You’ll correct some very poorly thought out public policy. And your approval ratings will go up in the process. Everyone wins. What could be better than that?

{ 1 comment }

Andre Pickens September 12, 2009 at 3:19 pm

I still do not understand why obama has this lock on poker in the USA. It actually it quite annoying but hey, What we say, We honestly dont have any control over that situation and all we can do is hope for the best

~Andre J Pickens

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