\nDid Sheldon Adelson buy Newsweek and no one said anything?
\n\tI\u2019m scratching my head for alternative explanations for how a mainstream news source could get so much wrong on the subject of regulated online gambling.
\n\tIn the order that they appear, here are 11 misrepresentations, inaccuracies and things that border on outright falshehoods from Newsweek\u2019s \u201cHow Washington Opened the Floodgates for Online Poker, Dealing Parents a Bad Hand,\u201d by Leah McGrath Goodman.
\n\t1. The Wire Act did not originally ban online gambling
\n\tGoodman opens by railing against the DoJ\u2019s decision to clarify the Wire Act in 2011.
\n\tThat, says Goodman lifted \u201ca long-standing federal ban\u201d on online gambling and had the effect of \u201creversing 50 years of legal precedent.\u201d
\n\tExcept the DoJ\u2019s decision reversed something much newer – the agency\u2019s own opinion on the Wire Act as it applied to online gambling, developed during the Clinton administration and articulated in a 2002 letter to Nevada lawmakers.
\n\tThat opinion was far from universally shared (even within the DoJ), especially as it applied to online poker.
\n\tAnd, as the Wire Act predated the commercial Internet by several decades, the idea that the Wire Act originally contained comprehensive, germane policy regarding online gambling is ludicrous on face.
\n\t2. The DoJ interpretation did not destroy the UIGEA
\n\tGoodman claims that the DoJ opinion shift had the effect of \u201crazing the foundation of the UIGEA, passed by Congress in 2006.\u201d
\n\tThree things:
\n\tFirst, the UIGEA was a rushed piece of legislation jammed through on the coattails of a terrorism bill in the dead of the night. Its foundation was shaky to begin with.
\n\tSecond, Goodman never actually articulates how this happened. She just asserts that it did and moves on. That\u2019s not enough.
\n\tFinally, the UIGEA was written in a way that placed the law at legal and logistical loggerheads with the Wire Act prior to the DoJ\u2019s 2011 opinion. More on that here.
\n\t3. You could legally bet on horses online before and after the DOJ opinion
\n\tGoodman asserts that the \u201conly federal restriction\u201d the DoJ opinion \u201cpreserved was the ban against online betting on such events as horse racing or March Madness.\u201d
\n\tActually: Americans in several states could bet on horse racing remotely before (and after) the DoJ\u2019s opinion change.
\n\tSmall thing? Sure. But facts matter. And it raises the legitimate question of where else Goodman and her editors cut corners.
\n\t4. The DoJ and FBI have not stopped cracking down on online gambling
\n\tFile this one under gross misrepresentation \u2013 or, at best, more slipshod writing and editing:
\n\tReached by Newsweek, the DOJ, as well as the FBI, both confirmed that, as a result of Seitz\u2019s opinion, they have ceased cracking down on online gambling and will leave it up to the preferences of the states.
\n\tNot quite.
\n\tThe distinction Goodman fails to draw \u2013 and she does it so often that it feels intentional \u2013 is the critical distinction between regulated, legal online gambling and unregulated, illegal online gambling.
\n\tThe FBI and DoJ haven\u2019t \u201cceased cracking down\u201d on legal online gambling in the US. Why?
\n\tBecause you can\u2019t cease doing something you were never doing. There was never any \u201ccrackdown\u201d by the FBI and DoJ on legal sites authorized and regulated by states like New Jersey.
\n\tMore irresponsible still: Goodman implies that the feds are no longer going after illegal, offshore sites as a direct result of the DoJ letter.
\n\t(She articulates this canard more directly later in the article, stating \u201cUntil Seitz handed down her opinion in late 2011, agencies such as the FBI had forcefully cracked down on online gambling in the U.S.\u201d)
\n\tThe FBI might beg to differ. Calvin Ayre might beg to differ. And so on.
\n\t5. If only we could find someone who knows about geolocation technology
\n\tGoodman takes the debate over geolocation technology \u2013 a valid debate that should be undertaken seriously \u2013 and reduces it to a single declaration by a man with a clear agenda and no relevant technological bonafides: Rep. Jason Chaffetz, who is sponsoring Sheldon Adelson\u2019s online gambling ban in the House:
\n\tChaffetz is wary of claims that geolocational technology, which works better in cities than in rural areas and vast expanses of desert (due to their reliance on hot spots and cellular towers to triangulate players), can keep poker out of his state.
\n\tThat\u2019s it.
\n\tNo balance. No thoughts from experts in the field, people who actually work with the technology or regulators in New Jersey, who have watched hundreds of thousands of online wagers pass through their system without a single report of an unauthorized bet.
\n\tJust more laziness.
\n\t6. The \u201cfloodgates\u201d were already open
\n\tGoodman leans on the biblically-tinged hyperbole in her headline and again later in the piece \u2013 the DoJ \u201copened the floodgates to online gambling.\u201d
\n\tTwo things:
\n\tFirst: They were already open. Unregulated online gambling in the U.S. was a multi-billion dollar business as early as 2003.
\n\tAnd accessing an illegal online gambling site \u2013 which requires none of the know-your-customer requirements or identity verification steps that are present with regulated options \u2013 is worlds easier than accessing a legal one.
\n\tThat matters. Because unregulated operators have displayed a clear pattern of exiting states where regulated online gambling launches.
\n\tIn this way, regulated online gambling nudges the \u201cfloodgates\u201d – which were swung fully open since the late 90\u2032s – tighter, not wider.
\n\t7. The DOJ opinion had nothing to do with social casinos
\n\tThis is where Goodman jumps the shark, with plenty of air to spare.
\n\tShe spends the next several paragraphs making the case against social casino games. They attract kids. They feed problem gambling. And so on.
\n\tThat may well be so. I\u2019m not familiar with the research on the matter.
\n\tBut it has absolutely nothing to do with the article Goodman has claimed to be writing up until this point.
\n\tSocial casino games \u2013 games like Zynga Poker and Slotomania \u2013 are not considered gambling under the law. Their rise in popularity has no connection whatsoever with the Wire Act reinterpretation.
\n\tTo say it a third time: The two things \u2013 the Wire Act and social casino \u2013 do not intersect at any point on any meaningful level.
\n\tSo why does Goodman spend nearly a quarter of her article talking about the harms of social casino games?
\n\t8. That\u2019s not how identity verification works in regulated online gambling
\n\tGoodman turns her focus back to real-money online gambling with a whopper:
\n\tWithout strong rules in place, Chaffetz fears young people will be able to log on and start placing bets without much trouble. Many sites assume players are old enough to play if they simply enter a credit card.
\n\tIn the parlance of poker: I call.
\n\t\u201cMany sites?\u201d
\n\tWhat sites, specifically? What regulated online gambling sites in the United States \u201cassume players are old enough to play if they simply enter a credit card.\u201d
\n\tWhat ones did you try to sign up for where this was the case? Did you report them to regulators, as it flies in the face of the basic rules for operating in a regulated market like Nevada or New Jersey?
\n\tOr did you just make that up?
\n\t9. Do you just think everything Jason Chaffetz says is true?
\n\tNext up, another hyperbolic generalization from Chaffetz is presented, unchallenged, as fact:
\n\t\u201cIn the physical world of bricks-and-mortar casinos, it\u2019s easy to see a 13-year-old on a casino floor. On the Internet, there are no physical barriers, nothing stopping a child from becoming an addict,\u201d he says.
\n\tAgain, the dialogue surrounding problem gambling and underage gambling online is an important one that should be had. But that\u2019s not what Goodman\u2019s interested in.
\n\tWe get no balance. No competing quotes from operators or regulators or folks from the multi-billion-dollar online identity verification industry.
\n\tWe also get no context. For example, underage gambling happens quite a bit in land-based casinos. Turns out there are some ages between 13 and 21. Who knew?
\n\t10. The US iGaming market is far from opened
\n\tThe DoJ\u2019s opinion \u201chas essentially opened the U.S. market,\u201d Goodman claims as the article transitions into a discussion on the lobbying surrounding regulated online gambling.
\n\tThis is a common thread among opponents of regulation. Chaffetz, et al, argue for RAWA by asserting that online gambling is happening too fast. That\u2019s a mythology Goodman advances by using terms like \u201cpandora\u2019s box\u201d and phrases like \u201copened the floodgates.\u201d
\n\tUnfortunately, it\u2019s simply not borne out by the facts. States still have to affirmatively legalize and regulate online gambling for the market to open.
\n\tConsider:
\n\tThe DoJ opinion was issued in September of 2011.
\n\tIn the three years since, only three states \u2013 Delaware, Nevada and New Jersey \u2013 have launched regulated online poker or casino games. All three were among what experts would consider low-hanging fruit in terms of willingness to regulate the activity.
\n\tNo new states regulated the activity in 2014.
\n\tNone are expected to go live with games in 2015.
\n\tGoodman rounds out her case with a quote from Jeffrey Derevensky:
\n\t\u201cSince the economy tanked around the world, you\u2019re seeing the greatest move to gambling ever,\u201d Derevensky tells Newsweek. \u201cThree states have online gambling, and you will see it proliferated throughout the United States. We\u2019re never going back. The governments are just too dependent on it for tax revenue.\u201d
\n\tNice story. But note that Derevensky is \u201ca professor of applied child psychology and psychiatry at Montreal\u2019s McGill University\u201d and not an expert on American politics or the American casino industry.
\n\tLazy.
\n\t11. Seriously, stop conflating regulated and unregulated online gambling
\n\tGoodman wraps up by employing one of the most hackneyed tricks in the anti-regulation arsenal: Taking a statement made about illegal, unregulated online gambling and suggesting that the statement describes regulated online gambling.
\n\tGenerally this trick relies on the mischaracterization of specific FBI testimony on the issue.
\n\tBut Goodman\u2019s got a new variation on the theme: pulling out-of-context quotes from the White House\u2019s response to a petition concerning online poker:
\n\tIt observed that online gambling posed \u201cdistinct challenges\u201d when compared with gambling in physical locations such as casinos, since players might sidestep \u201crestrictions on online gambling that can allow individuals from countries where gambling is illegal, or even minors, to play using real currency.\u201d It also noted the use of online gambling portals as a conduit \u201cfor money-laundering schemes, because of the volume, speed, anonymity and international reach made possible by Internet transactions.\u201d
\n\tWhen you read the whole response, it\u2019s crystal clear that those concerns are related to illegal, offshore online casinos, and not the regulated sites strictly overseen by officials in New Jersey or Nevada.
\n\tGoodman either doesn\u2019t know enough, or doesn\u2019t care enough, to make the difference clear to the reader.
\n\tFrankly, by this point in the article, that\u2019s pretty much what I\u2019d come to expect.<\/p>\n
No replies were posted for this topic.<\/p>\n","protected":false},"excerpt":{"rendered":"
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