Archive for May, 2010

Oregon Congressman Changes Mind About Online Gambling

Thursday, May 20th, 2010

It seems that U.S. Representative Earl Blumenauer (D-OR) has changed his mind about online gambling. Four years ago, he joined the majority in voting for the Unlawful Internet Gambling Enforcement Act (UIGEA). Though the bill doesn’t actually ban online gambling (a fact reinforced by a recent Supreme Court decision), it does allow the federal government to go after financial institutions that are involved in transactions that are considered “unlawful” internet gambling transactions. Which transactions are unlawful is anybody’s guess – that’s one of the problems with the law – but many people believe it only applies to states that have banned online gambling.

Though he voted for a government restriction of online gambling in 2006, Blumenauer now says that he was wrong to do so. Yesterday he released a statement saying that the United States is missing out on gambling revenue that could help states and the federal government with their budget problems. In addition, he believes that allowing online casinos to operate in the U.S. would create jobs.

Blumenauer also suddenly realized that restricting online gambling is hypocritical, since fantasy sports, horse racing and state lotteries are exempt from UIGEA’s rules. So Blumenauer has finally seen the light. Good for him. I wonder who pointed it out to him (maybe he’s been talking to Ron Paul).

There is a popular misconception that Democrats are for legal online gambling and Republicans are against it. They say that UIGEA was pushed through Congress because the Bush administration wanted it done and Democrats have been fighting it ever since.

Like much of the popular opinion regarding politics, that is inaccurate. UIGEA was passed in 2006, during Bush’s second term. That much is true. However, the bill, which was part of the SAFE Port Act, had overwhelming bipartisan support. In fact, it had a type of bipartisan support that is rare in such a polarized era. The bill passed the House of Representatives by a vote of 421-2, with 9 representatives not voting (why members of Congress can abstain from voting so often when that is their only job is another story). It then passed the Senate by a 98-0 vote, with 2 senators not voting. After differences in the House and Senate versions were resolved, the conference report was then passed by the House 409-2, with 21 representatives not voting.

Two, folks. Two people voted against the bill. Of those two who voted against the bill, one was a Republican (Jeff Blake of Arizona) and one was a Democrat (Edward Markey of Massachusetts). Barney Frank, the current “patron saint” of online gambling, did not vote.

This is the legislation that he now deems to important to overturn, yet he didn’t even vote on it. Not an aye, not a nay. Nothing. Keep in mind that UIGEA was part of the much larger SAFE Port Act, which was concerned mostly with port security, but to say that it was a Republican bill that Democrats opposed isn’t exactly accurate, considering that only 1 Democrat voted against it and just as many Republicans did as well. Now, I don’t support either party, because they both suck (though I think Republicans suck less), but it’s time for some people to get their stories straight.

Committee Not Sold on Legalizing Online Gambling

Thursday, May 20th, 2010

Some members of the U.S. House of Representatives are trying to get a federal legalization of online gambling so they can regulate and tax the industry. Such initiatives would overturn the Unlawful Internet Gambling Enforcement Act of 2006, which – though it didn’t outlaw online gambling – does allow the feds to go after financial institutions used in “unlawful” online gambling transactions. There is currently no federal law that bans online gambling, though it is banned in a few states.

The push to overturn UIGEA and regulate online gambling in America has been led by Democrat Barney Frank (D-MA) and Republican Ron Paul (R-TX). My personal opinion is that Paul wants online gambling legalized because the government has no business telling people what they can and can’t do with their money and Frank wants it regulated because he loves the government controlling and taxing businesses.

Since the Frank-Paul bill was introduced – but not yet brought to the floor –Jim McDermott (D-WA) introduced a companion bill called the Internet Gambling Regulation and Tax Enforcement Act. It has been co-sponsored by Earl Blumenauer (D-OR), Frank and John Larson (D-CT).

Last week McDermott’s bill was brought before the House Ways and Means Committee, which is the chief tax-writing committee in the House. Strangely enough, several members of this tax-writing committee – such as Charlie Rangel (D-NY) – have used ignorance of the tax code as defense for tax fraud.

Anyway, last week the committee looked at McDermott’s bill and they seemed unimpressed. McDermott stated that America was simply driving gambling revenue offshore, giving money to foreign countries that America desperately needs. He also said that his bill would generate $72 billion in revenue over 10 years from creating new taxes. Among the new taxes are plans to tax the players on their deposits up front, taxes on the casinos on the wagers themselves, taxing the players’ winnings and more. Of course, there would also be many different types of licensing fees for the casinos, just like for current brick and mortar casinos.

Two representatives from Nevada weren’t too big on the bill, which isn’t surprising, since they have to look out for the interests of Las Vegas. Republican Dean Heller said he would keep an open mind, but he is concerned about online gambling’s impact on the Vegas strip. He is also against the “deposit tax” that would take money away from players up front, whether they win or lose at the casino. The other Nevada representative on the committee, Democrat Shelley Barkley, said she supports the legalization of online gambling, but not the taxing of it – at least not right away.

I know what you’re thinking? What? A Democrat is wary about adding a new tax? How can that be? Also surprising for a Democrat, she made a good argument. She wants to legalize and regulate the new online casino industry and let it develop first before taxing it. “Because the industry is not even established yet, I can’t imagine how we can know with any degree of certainty how the special tax would affect operators or customers,” she said. Instead, she says that it should be legalized and regulated, but should not be looked at as a source for revenue. Wow, now she’s sounding like a conservative.

No decision was made on whether to move forward with the bill. This is Washington; things move slowly.

Casino: Gambling and Drinking Age Should Be Same

Tuesday, May 18th, 2010

Casinos in Connecticut are struggling to make money and are searching for ways to keep their business alive. That isn’t exactly a surprise. You can take that first sentence and replace “Connecticut” with any other state and replace “casinos” with virtually any other type of business and it is still accurate. Everyone is hurting right now, with the exception of labor unions, government employees, and political activists that are helping shape government policy.

Casinos are among the hardest hit by recession, though, because when people begin to tighten their wallet, trips to casinos start being cut out of the budget. Even President Obama told people not to go to Vegas anymore, which didn’t exactly please their Chamber of Commerce.

In light of all of that, casinos are looking at new ways to make money. Some in the Connecticut casino business, such as Rodney Butler, the owner of Foxwoods Resort Casino, are suggesting a reduction in the legal gambling age. Currently you need to be 21 to gamble in the state of Connecticut. The proposal would reduce the minimum gambling age to 18. Others within the casino industry, such as Mohegan Sun casino owner Lynn Malerba, disagree.

Malerba is chairwoman of the Mohegan Tribal Council and chief of the tribe. Through a spokesman, she stated that she believes that “the difference between a gambling age of 18 and a drinking age of 21 would make such a change very difficult to implement and manage.” Malerba indicated that changing the gambling age to 18 would only work if the drinking age was also lowered to 18 due in part to the fact that gambling and drinking tends to go hand in hand within casinos.

I imagine Malerba is worried about potential lawsuits if the casino staff serves alcohol to minors. Currently anyone allowed admission to the casino is legally allowed to drink so there is no problem. In addition, are 18 year olds going to be interested in visiting a casino if they can’t drink? I don’t think so. That brings up two possibilities then. Either reducing the gambling age would not attract new business because the 18 year olds would not go to the casinos knowing they can’t drink, or the casinos would have to be lax in their carding of guests. Many bars have a reputation for not checking ID’s frequently, which makes them popular with minors. However, a casino caught doing that could conceivably be fined, face legal action or even be shut down.

And while we’re on the subject, saying that 18 year olds are old enough to gamble with their money but not old enough to order a beer is just ridiculous. Society needs to determine at what age a person is an adult. Different states have different rules on that. The legal age of consent ranges from 16 to 18, the drinking age used to range from 18 to 21 depending on the state, but that changed with the passing of the National Minimum Drinking Age Act of 1984, which effectively changed the minimum age to 21 in every state. You must be 18 to buy cigarettes in most states, though in some it is 19. In most city, county and state law enforcement agencies you must be 20 or 21 to join. You must be at least 21 for a federal law enforcement job. However, in every state in America you may join the military at the age of 18.

Does any of that make sense? Now I support a state’s right to set their own age limits rather than having it all done federally. That will cause a difference in the ages from state to state. Can we at least get some consistency within the state borders, though? Why do we have some states where you can have sex at 16, join the military at 18, join the police department at 20 and drink alcohol and gamble at 21? If you’re 18, you’re mature enough to go off to a foreign land and risk your life defending America but not mature enough to have a beer while you’re there? Oh, and you better not play poker in the barracks, either. I also think it’s crazy that we have cops who are not legally allowed to drink arresting people for underage drinking.

So what should the age be in Connecticut? It’s something to think about.

States Consider Legalizing Vice During Recessions

Wednesday, May 12th, 2010

Many states that had previously been opposed to gambling are trying to legalize it now. As a recent Wall Street Journal article explained, such an occurrence isn’t uncommon. Tough times cause people to rethink their priorities. After all, if unemployment is through the roof and people are losing their homes and jobs, how important is a ban on certain “vices?” That’s a question each person has to answer. Some people say you should never compromise your morals, while others say that desperate times call for desperate measures. Maybe the truth is somewhere in between. Maybe during tough times people consider whether those things they thought were vices are really that bad.

Prohibition was repealed during the Great Depression, as was the ban on horse race betting. It was during tough economic times in New Jersey that Atlantic City voted to legalize casinos in 1976. In 2001, after the 9/11 attacks, New York expanded video gambling in their bars in an attempt to increase revenue.

Many counties across the United States have eased or are considering easing their restrictions on alcohol sales on Sunday. Twelve states have expanded or are considering expanding gambling as a source of additional revenue, including Florida, California, Colorado, Minnesota, Ohio, Iowa, Missouri, Kentucky, Maine, Massachusetts and New Jersey.

The state of Ohio marks the most drastic reversal on opinion regarding gambling. During the 1990’s and 2000’s, Ohio voters rejected plans to build casinos four times. The message was clear: The people of Ohio don’t want casinos in their state.

So what do they say now? Facing 11% unemployment and a state budget deficit of $3.2 billion, Ohio voters approved a plan to build new casinos in the state. The state’s current governor, Ted Strickland, has also reversed course on the gambling issue. In the past, he opposed gambling and called it a regressive tax on the poor, but in an attempt to ease the budget woes, he proposed an expansion of video gambling machines. Strickland was against building full-scale casinos, but signed the bill as a concession to the voters.

To his credit, Ted Strickland put aside the fact that he’s a Democrat and has made a lot of cuts in his state’s budget, including reducing spending by $2 billion, cutting 2500 government jobs, and slashing the budgets of most state agencies by 10-20%. However, he found that without adding additional sources of revenue, such as gambling, he would have to slash the agency budgets by at least 30%, which is something he wants to avoid.

It probably won’t surprise you to know what is accounting for most of Ohio’s budget problems: Medicaid and other entitlement programs. Though entitlement programs are a much bigger problem at the federal level, they are crippling states as well (especially California, but that’s another story). Margaret Thatcher once said that “the problem with socialism is you eventually run out of other people’s money.” Such is the problem with social entitlement programs. They are basically a Ponzi scheme that robs Peter to pay Paul. The problem is that they pay out more money to Paul than Peter pays in. If you are giving out more money than you have coming in, that puts you in debt. Such is the case with Ohio, most other states (38 are in the red) and the federal government.

Therefore, an expansion of gambling is a good idea as part of the fix, but it can’t fix the economy alone. There are many other changes that need to be made, with the main changes being to reduce spending and reform (or end) the entitlement programs. Unfortunately, I doubt Governor Strickland sees that.

Recession Caused Decline in Non-vital Spending

Monday, May 10th, 2010

A recent article by the geniuses at TIME magazine stumbled upon the following bombshell: As a result of the “Great Recession,” people have cut down on unnecessary spending. Wow, imagine that. More than 10% of Americans (the 9.9% number is a very conservative one) have no job and virtually everyone else is worried that at some point their job could be cut as well. As a result, they have cut back and are only spending money on the essentials. It’s the type of thing that makes sense to everyone but the government, who is the only entity capable of thinking, Well, we got into this economic crisis by spending more money than we could afford, so let’s try to get out of it with an unprecedented level of spending!

In the article, TIME points out that people are donating less to church and spending less at casinos. Both are types of spending that, regardless of their merits, isn’t necessary for the survival of the spender. Donating to churches or other acts of charity are done as an act of compassion for others, but if there’s less money to spend or people are worrying about having less to spend in the near future, it makes sense for people to look out for themselves first.

As for the casino spending, gambling, as much fun as it may be, is not an essential either. Just as it isn’t necessary to go on a vacation, visit a theme park or go to a baseball game, you don’t have to gamble at a casino to survive. For that same reason, even though TIME didn’t mention it, revenue at vacation destinations, theme parks and baseball games is drastically down this year as well.

So how far has gambling revenue fallen? The American Gaming Association reported that in 2009, casino revenue fell by 5.5% from the previous year. That’s pretty bad considering the casino industry was already losing money back in 2008.

This brings up an interesting conundrum. As states are strapped for cash, many are looking to gambling expansion – or to legalizing gambling for the first time – to add revenue to the state. However, they are trying to fight the recession by using an industry that is being hurt by the recession. Wouldn’t that be kind of like deciding to open more banks and auto manufacturing plants right now? Most casinos right now are losing money and some have already had to shut their doors. Opening a new casino that will soon be in the red isn’t good for anyone, is it?

I guess it’s kind of a gamble (no pun intended). States want to add revenue from casinos in the hopes that they can use the money to balance their budget without raising taxes, which would further hurt the economy. Then once the economy recovers and people find jobs and become more optimistic, attendance at casinos will increase and the industry will once again be making money. The only problem with this plan is that regardless of what each state does, the federal government can prolong the recession and keep unemployment around 10% by continuing their current policies.

Add to that the fact that online gambling expansion one place can hurt the business of a nearby gambling market. For example, opening casinos in Pennsylvania is good for them, but the nearby casino industry in Atlantic City, New Jersey isn’t too happy about it.

So what does all of this mean? Well, it means that though gambling expansion in the state may help by proving revenue, it should be done carefully. Anyone who opens a new casino should be able to survive losing a lot of money early on, even more so than is usually the case with a new business.

Progressive Table Party at Spin Palace

Thursday, May 6th, 2010

Spin Palace is known for its tournaments, especially its slot tournaments. That’s probably why they have “spin” in their name. Right now they have a good tournament going on for table games, though.

The promotion is called the Progressive Table Party and it runs from May 3 to May 23. Unlike with politics, progressives in gambling aren’t always bad. In this case, it can mean extra money. During this promotional period, the online casino will track all money you wager on their progressive table games, which includes Roulette Royal, Triple 7s Blackjack, Poker Ride, Cyberstud Poker and more.

In the Progressive Table Party promotion, players will be rewarded for wagering on the progressive table games. Therefore, the more you play and the more you spend, the better your odds of winning prizes. If you’re lucky, you also win money at the table games, in which case the prize money would simply be icing on the cake.

The Progressive Table Party has a $2,000 prize pool that will be split among the top wagerers during the promotion period. The player who wagers the most on the specified games will win $800. The player who wagers the second most will get $400 in prize money. Not only that, but the player who places the largest number of bets – regardless of the amount of each bet or the total amount of money bet – will win $200. The other $600 will be shared by 8 players in the promotion who will be randomly selected. Therefore, even if you only play one game with a small wager during this promotion you have a chance to win some prize money. Your odds are increased if you wager a lot of money, though, since you can win one of the top prizes.

If you are a fan of online blackjack, online poker or other table games, especially those with a progressive jackpot, this is a good promotion. You have a chance to win money for doing something you already want to do: play some table games.

To take part in the Progressive Table Party promotion, visit Spin Palace today.

China to Crack Down on Online Gambling?

Monday, May 3rd, 2010

Oh, those crazy Chinese are at it again. We know that the Communist Chinese government isn’t too high on freedom, including a free flow of information or the ability for people to do what they want with their money. Come to think of it, in China it’s not really your money, is it?

Anyway, those zany folk in Beijing have stated that there will be a crackdown on what they call “overseas hostile forces.” Of course, in China, you are seen as being a hostile force if you are anything other than the Chinese government, which means that everything overseas is automatically hostile.

In Red China, there is actually a department in the government called the Information Office. It is that office that controls what information the people are given and is responsible for telling the people what they want to be known and hiding what they don’t want to be known. So, in that way it’s a lot like Obama’s relationship with the New York Times.

Anyway, Wang Chen (no, I didn’t make up that name) is the chief of the Information Office and he released a statement saying that China “will strengthen the blocking for harmful information from outside China to prevent harmful information from being disseminated in China and withstand online penetration by overseas hostile forces.”

Allow me to translate that from propaganda to English. When China says “harmful information,” what they mean is any information that doesn’t match the official information released by the Information Office. For example, information about freedom, democracy, protests, ownership, property, and human rights would be considered “harmful” information that needs to be kept from the people. Such information is currently being blocked from the Internet in China, but there are always ways around that censorship, which is why they need to crack down.

How this relates to online gambling is that in China’s mainland, gambling is illegal. That includes online gambling. However, there are many online casinos from overseas that currently accept Chinese customers. Online gambling is another thing that is considered harmful by the Chinese government, because it is a way for the Chinese citizens to spend money on something that is not provided by the government.

In response to this statement, many online casinos that were accepting bets from Chinese customers have stopped. Some have delayed deposits and withdrawals from China. Some online casinos have warned Chinese customers that the government may be monitoring their transactions.

So for any Chinese online gamblers, I’m sorry to say that you may soon be out of options for casinos. Of course, I’m also sorry to say that you live in China, don’t have freedom, and may soon be arrested and taken to a secret prison for the “crime” of reading this article.

Just so we’re clear, here’s a list of things that China does and doesn’t like. This is not a comprehensive list.

Chinese government likes: communism, controlling all aspects of the lives of its citizens, manufacturing products and selling them to America, running over protesters with tanks, executing political adversaries and starving millions of people to death.

Chinese government dislikes: freedom, democracy, truth, Google, privacy, religion, public gatherings, private property, self-sufficiency and online gambling.

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