When people talk about the U.S. government cracking down on online gambling – whether it’s Black Friday, UIGEA, or whatever – you hear a lot of blame go around. The blame used to be aimed squarely at Republicans, saying that social conservatives were blocking the industry because they are morally opposed to gambling. But now that the White House and half of Congress is Democratic, it’s hard to make that case. It’s harder still when you point out that Eric Holder’s Justice Department is the one going after online gambling. Holder, of course, is one of the most liberal U.S. Attorneys General in history and his iron-fisted control of the few conservatives remaining in the DOJ has been a source of controversy.

So if it’s not Republicans, what’s the problem? The problem is big government, progressivism or whatever you want to call it. It’s a problem with both major parties. Both sides want a big government to dictate how things happen in America for the “greater good.” If Republicans opposed online gambling on moral grounds, Democrats oppose it because they don’t trust an industry they aren’t regulating. They also don’t want people to pay for something that they aren’t taxing, because the government isn’t getting their cut. It’s the same reason bootlegging liquor is illegal. There’s nothing about moonshine that makes it more immoral or dangerous than Jack Daniels, but it is illegal to make and sell because it is not regulated or taxed. If you’re not paying off Uncle Sam, he doesn’t want you doing it. Don’t forget that it was during the “Progressive Era” that Prohibition was passed.

This brings us to a problem: Both parties support big government controlling your lives. They differ on how they want to run your lives and on what they want to outlaw, but in both cases, they think they know what is best and you should let them make the decision. Are the Democrats who support online gambling regulation doing so because they want you to have more freedom or because they want the tax money? Does it even matter?

Those who favor freedom to play at online casinos in the U.S. without risk of government action support one of two changes. One is to support the federal government regulating the industry. If they regulate it, you can do it without risk of your account being frozen. The other option – the one I support – is to have the government back off entirely, say the industry is legal and leave it alone.

There are few industries that have benefited from government regulation. Generally they make things more expensive, inefficient and complicated. I promise you this: If the federal government regulates online gambling, the industry won’t be the same. The casinos will make less money, due to high taxes. The customers will see smaller prize pools for tournaments and less generous bonuses. The government might even cap the rate of return, as some European governments do.

So what’s the answer? That depends on if you support Option A (government regulation) or Option B (government leaving the industry alone). If you want Option A, support Democrats like Barney Frank and big government Republicans like John Campbell who want to regulate the industry. If you favor Option B, look to libertarians and small-government Republicans (such as those with Tea Party backing). Those who favor small government oppose the feds telling you how you can and can’t spend your money, regardless of whether they agree with gambling. In either case, it is important to focus on individuals and throw those old stereotypes away.

Australia’s Productivity Commission says that the federal government needs more control over the gambling industry. That shouldn’t come as a complete surprise. The Productivity Commission is an independent research and advisory board appointed by the Aussies’ federal government. So an entity appointed by the federal government and asked by the federal government to study the gambling industry finds that the federal government should run it? Hmm…

The Australian Productivity report on gambling has come out and they say that the federal government should take the regulatory authority away from the individual states and handle it themselves. They also advocate placing a 2% tax on all gambling revenue. The federal government could also offer “incentive payments” to the states to reduce their “reliance” on slots tax. Those payments are supposed to be to help wean the states off of gambling income rather than cutting it off abruptly, though some people see the idea as bribery.

All of that is troubling to people who advocate small federal government and local governments taking care of as much as possible for themselves. It gets worse, though. The report also suggests establishing a national player tracking system so the federal government can detect “abnormal or risky playing patterns.”

Gee, do you think that’s something that could be abused? The concept behind that idea is that Australian citizens are incapable of taking care of themselves and making sure they don’t spend too much money at the casinos. Therefore, the government has to monitor them and step in if they think the gambling is becoming a problem, if they are betting too much money, or just being irresponsible.

The new government system would allow the federal government to track all money spent on gambling by the citizens, how much money they spend, where they spend it, how much they win or lose, what games they are playing and more. The potential for this financial espionage to be abused is enormous. Of course, the government playing the role of Big Brother isn’t new. Look at their internet censorship history, which, though not as bad as China’s, is exceptionally bad when you consider that – unlike China – Australia is supposed to be a free country.

Here at Gambling Review, I support gambling expansion. However, I’m hoping that Australia’s federal government doesn’t listen to the suggestions of the Productivity Commission.