A young man wearing a dark gray hoodie knelt down beside me in church. I couldn’t help overhearing his prayer:
Mea culpa, mea culpa, mea maxima culpa. I’m a self-made multimillionaire. I take calculated, aggressive risks with my own money. I prefer online gambling to betting around an antiquated poker table. Yes, I am socially inept, I live in sweatpants and I don’t remember the last time I dated an attractive girl. But, I do make piles of money and I can create jobs for media professionals, advertisers, web developers and bankers. Forgive my personal success, my New York penthouse and my killer sports car. Forgive my social awkwardness. If I recklessly bet away my wealth, I alone will suffer. Let me play online poker.
I felt sorry for this young gamer who was bemoaning “Black Friday:” On April 15, 2011, the Department of Justice and the FBI clamped down on the online gaming industry that does business in the United States. The DOJ charged the founders of the three largest internet companies, Absolute Poker, PokerStars and Full Tilt Poker, plus eight other defendants, with illegal gambling offenses, money laundering and bank fraud.
No individual player was charged with criminal activity, however, the DOJ seized five key internet domain names and put restraining orders on over 75 defendant company bank accounts that process payments, effectively freezing online poker in the U.S.
I realize that the DOJ must uphold U.S. law. Except for laws still on the books it doesn’t care for, like Clinton’s DOMA. But, this case sets a frightening precedent for the DOJ to essentially destroy a $6 billion industry and dampen entrepreneurship overnight.
The DOJ cites the Unlawful Internet Gambling Enforcement Act (UIGEA) in this prosecution. The integrity of UIGEA is suspect because dirty politics played a key role in passing it. On Oct. 13, 2006, presidential hopeful and then-Senate Majority Leader Bill Frist slipped UIGEA through Congress by attaching it to a high priority port security bill, in an obvious attempt to win political favor.
The New York Times notes that the law is also vague and fails to clearly articulate that online poker is criminal activity. Additionally, portions of this prosecution cite state gambling laws while the three defendant companies operate overseas where federal law governs international commerce. So, it’s not entirely surprising that foreign-based poker companies persisted in servicing the U.S. market.
In this prosecution, the DOJ is maintaining its track record of prosecuting high-profile, made-for-Hollywood cases such as billionaire Raj Rajaratnam’s alleged insider trading and the alleged steroid use and obstruction of justice by former Major League Baseball celebrities Barry Bonds and Roger Clemens.
Yes, online poker finds both conservative and liberal opponents. Focus on the Family and Christian Science Monitor support these prosecutions. Anti-free market types - who despise competition and individualism - whine that online poker changes the “true” nature of the game and rewards whippersnappers who can take aggressive risks because they are young and single.
However, there is little scientific evidence that the majority of gamblers are irresponsible. A lead researcher in a 2009 Harvard Medical School study revealed that most gamblers exhibit “rational betting behavior” and problem gambling has decreased to 0.6 percent, reports Poker News Daily.
Should the DOJ perp-walk the owners of jewelry stores and big game hunting excursions? After all, their businesses could encourage people to waste thousands of dollars on “frivolities” and obliterate a family savings account as quickly as gambling.
In reality, mastering online poker requires tremendous practice, skill and mental dexterity. 21-year-old multimillionaire Daniel Cates told The New York Times, “…I just kept working at it.” He told The Times that he was a natural loner with a strong work ethic. At age six he began mastering games like Minesweeper and Command and Conquer. After years of developing gaming skills and even taking a job at McDonalds to responsibly finance his bets, he became a rising star in high-stakes poker.
Online poker is a poster-child for capitalism: It shows that anyone - young or old, handsome or homely, rich or poor – can become a self-made multimillionaire with hard work, persistence and a willingness to take personal risk. Optimism, moxie and years of lonely trial and error allow entrepreneurs like online poker players to take leaps that people with low confidence and a love for security blankets would never take.
Online poker is legal in many civilized parts of the world, such as Canada and Europe. Legalizing online poker could bring a $6 billion industry and thousands of jobs to the U.S. I think the DOJ should consider forgiving online poker its “crimes,” ensure the industry has legal clarity, and, let the free market regulate online gaming in the U.S. Otherwise, this prosecution could restrict online freedom, further weaken our economy and chill entrepreneurship.