Natural disasters on historic scales tend to make you rethink things. As the floodwaters continue to recede in Mississippi, lawmakers are thinking about what to do to protect the river casinos from future disasters. The solution isn’t simple, though.

After Hurricane Katrina, Mississippi lawmakers passed legislation that allowed casinos on the coast to get off the barges and move a short distance from the shore. Some wanted an amendment that would allow the inland river casinos to do the same, but there wasn’t much support for that idea so it quickly died. After the historic flooding of the Mississippi River, people are now revisiting the option and looking for other ways to protect an industry that is vital to the state.

Accounting for $13 million per month in tax revenue, the casino industry is important for Mississippi. A stable casino market is needed for the state to pull itself out of the recession. One available option is to take advantage of a law passed in 2004. That law allows river casinos to build on pilings rather than being directly in the water. Only two of the state’s casinos took advantage of that law, Riverwalk Casino in Vicksburg and Harlow’s in Greenville, but more may opt to.

Eddie Williams, the deputy director of Mississippi’s Gaming Commission, said that the 2004 law allows the casinos “to go up above the floodwaters.” He added that “the reason nobody took advantage of it is that nobody saw a 500-year flood coming.” In the aftermath of the devastating flood, though, you’d have to think that all options are on the table.

Some will clamor for the river casinos to move onto the shore, but Representative John Mayo, who has several casinos in his district, says that wouldn’t be fare. The law requires casinos to “put a sizable investment in nongaming property to open a casino. Some of these casinos sunk a lot of money in the development.” Allowing river casinos “to locate on the dry side of the levee wouldn’t be fair to those casinos that made sizable investments on the river side,” he said.

There are many options available for protecting the important Mississippi casino industry. All of them should be carefully analyzed soon. Webster Franklin, president of the Tunica Convention and Visitors Center, said that over the last three weeks, 9,600 employees have been unable to work and they have lost out on up to 25,000 tourists per day.

On Thursday, the Nevada Assembly unanimously passed a bill that would set up a regulatory framework for online poker. The bill was severely weekend in committee when parts were stripped out that would immediately start allowing poker regulation. Instead, it is now contingent on federal action.

If the bill becomes law, Nevada would set up an intrastate online poker regulatory framework. The regulators would come up with the necessary rules, develop licensing procedures and more. Then they would wait. The bill requires federal approval for Nevada to actually start regulating the industry, even though it would be an intrastate industry.

So there are three options. The first is that the feds say “yeah, you’re cool. Go ahead.” Nevada could then start regulating intrastate online poker. The second option is that the federal government does nothing but eventually regulates the industry at a national level. In that case, since the feds have approved the industry, Nevada could also move forward. In the third scenario, the federal government does not approve of the bill and does not regulate online poker, so the law is worthless.

There is no federal law against online poker in the United States, but the U.S. Department of Justice is of the “opinion” that it is banned. Funny how that works. Though Nevada’s bill is decidedly weak and I joked before that because they made it spineless, I no longer care, in truth it does some good. It may not be much, but the bill is better than nothing, because it’s a state showing approval of online poker.

The bill next will go to the state Senate. Most insiders expect it to easily pass there as well and later be signed by the governor. After that, it’s a waiting game with the federal government.

So the first jurisdiction in the United States to regulate online gambling is… the District of Columbia. Didn’t see that one coming, did you? It kind of snuck up on us as we were focusing on New Jersey, California, Florida, Nevada and other states.

Even when the D.C. Council passed legislation in their budget bill last year allowing the lottery to offer online poker, it seemed like a long shot. The federal government had the ability to block implementation of the bill, and since the feds in D.C. oppose online gambling, most people speculated that Congress would vote to block the bill.

In Washington, D.C., because of its unique situation as a federal district, all bills passed by the D.C. Council have to be approved by Congress. The U.S. Senate and House of Representatives get 30 days to approve or strike down the bill. If at the end of that 30-day term, they do nothing, the bill is considered approved and goes into law in the District of Columbia.

That 30-day deadline passed at midnight on Thursday. Therefore, the measure takes effect. The bill in question allows the D.C. Lottery to run an online poker website. The website could only be accessed by residents of the District of Columbia, so instead of an intrastate online gambling market, it will be an intra-district market. That makes it a rather small market and no one can guess how successful it will be, but Councilmember Michael Brown, who proposed the bill, predicts that it will generate $13 million for the district over the first three years.

The bill allow the lottery to offer online poker, but the regulatory framework is not yet established and, obviously, the website is not up and running. Experts predict the new online poker market to go into effect in 2012.

As I reported last week, the Canadian province of British Columbia became the first jurisdiction in North America to legalize and regulate online gambling when they launched a casino on Thursday. British Columbia’s Lottery Corporation launched an online casino on their PlayNow.com website.

Now I have good news and bad news. The good news is that the new online casino has been wildly popular. The bad news is that the website is currently down. That means that online gamblers who want to play now, can’t do it at PlayNow.com.

Within a couple hours of launching the new government-run online casino, the server crashed due to being overloaded by visitors. The Lottery Corporation didn’t have an infrastructure that could handle the massive increase in traffic volume at the site. Due to that, the website is currently down and Canadian citizens eager to play their favorite online casino games can no longer do so, unless they go back to the foreign operators.

While it’s bad news that the website is down and the Lottery Corp. couldn’t handle the traffic, it’s good news that the site was so popular. Online gambling is often seen as a small issue, and in the grand scheme of things maybe it is. However, the crashing of the B.C. server shows just how popular that activity is, which is a good reason to push for further legalization throughout the rest of North America.

There is no timetable yet for a re-launch of the website. Whenever it does get back up and running, though, the Lottery Corporation can expect a large number of deposits and wagers from British Columbia residents.

It’s not often that I agree with Shelley Berkley, or any Democrat for that matter, but she had a rare moment of common sense this week. In a Roll Call article, the U.S. Representative from Nevada criticized the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.

Berkley stated that the UIGEA does nothing to protect the American people from dangerous online casinos and is also ineffective in preventing online gambling. She also pointed out that the “law doesn’t even make clear what is illegal gambling and what is not when it comes to the Internet.” She said that the law takes enforcement out of the hands of the correct agencies and instead pins “a cyber ‘tin star’ to the chest of the financial industry with the idea that these companies would become the new ‘virtual sheriff’ in town.

UIGEA never defines what online gambling is illegal and there is no federal law that does so, either, though the Department of Justice considers the practice to be against the law. Of course, the DOJ often invents new rules and laws like that, despite a lack of authority to do so. The UIGEA simply places the burden on the financial industry to make sure no “unlawful” online gambling payments are processed, without even defining what is unlawful. It is an unfair burden on an already hurting industry and it is bad for online gamblers throughout the country.

In the article, Berkley compares UIGEA and the de facto ban on online gambling to the prohibition of alcohol during the 1920’s and 1930’s. It’s always funny when liberal Democrats use Prohibition as an example, considering that the law was passed during the Progressive Era, when big government took unprecedented control over industry and the private lives of American citizens all in the name of the “greater good.” Progressives of that time period are heroes of the big-government liberals of today, yet they’re happy to denounce Prohibition. I guess they’re fine with the government controlling everything else, but they also enjoy their booze.

Ideology aside, Berkley is right. During the Prohibition, the government tried to keep Americans from drinking, but instead it just made them more secretive about their drinking. It also had the added bonus of giving power to gangsters like Al Capone. UIGEA and the unlawful de facto ban on online gambling does not prevent Americans from gambling at online casinos, but it makes them hide it and it keeps those casinos away from the watchful eyes of regulators.

Of course, government regulation isn’t necessarily a good thing. The two most heavily regulated industries in the United States are the oil and financial industries and we’ve seen a bit of damage to those lately. Additionally, government regulation of online casinos would most likely result in the players being charged more, such as the poker rake increase we’ve seen in France.

Whether the U.S. government should regulate online gambling is a question open to debate, but one thing is certain: The government needs to stop trying to prevent people from spending their own money as they please. Like during Prohibition, this is a case of the government thinking they know better than the people and we have seen time and again that nothing could be farther from the truth.

Ah, government regulation. Many online poker players and proponents of online casinos support governments regulating online gambling because that gives them easier access to the games. In some countries, it would also take a currently illegal activity and make it legal. There is a problem that goes along with government regulation, though. Actually, there are many problems, but a major one is money. You see, governments aren’t going to regulate an industry out of the kindness of their hearts. They do it for tax revenue.

France recently opened up their online gambling market to foreign operators so online casinos based overseas could attract French customers. This was seen as a victory for supporters of online gambling in France. However, the legislation also mandated a 2% tax increase on all new online gambling sites. Those are sites that are new or new to the French market. For that reason, all overseas online casinos that entered the French market were slapped with a 2% tax increase.

Liberals and other people who know nothing about business would say, “So what? Those rich casinos can afford to pay more money. I don’t care if their taxes went up, since it doesn’t affect me.” The problem is, whenever you raise taxes on businesses it does affect you. It affects anyone who is a customer or partner of that business and anyone employed by that business. When hit with a higher tax, businesses will usually pass that extra cost on to their customers. That is exactly what online casinos are doing.

Most online poker sites operating in the French market have increased the rake by 2%. Some of those casinos and poker rooms are reporting rakes as high as 7.7%. That means it is costing the online poker players a lot of money and they are not too happy about it.

To protest the higher rakes, many online poker players have organized “sit out” protests. This method has the players signing up at poker tables but then refusing to play. With them occupying the table, no one else can take their spot and the casino loses money. Their goal is to force the online casinos and poker rooms to lower the rake percentage. The casinos, however, say that they have been losing money ever since France enacted the new gambling laws and instituted the tax increase and the only way they can remain profitable is to increase the rake.

And there you have the problem. The government running an industry is always bad for the industry, but it’s even worse for the consumers. The poker players don’t want to pay the high rake, but it’s necessary for the casinos to stay in business thanks to the tax hike by the government. Without that additional tax revenue, though, the government would not allow the casinos to operate in their country. It is a situation where nobody wins.