Bush Signs into Law Online Gambling Transaction Ban

By Scott M. Fulton, III | Published October 13, 2006, 1:13 PM

As widely anticipated, President Bush this morning signed a bill whose principal purpose is to tighten security measures for the nation's sea ports. But attached to that bill at the very last minute -- in order to prevent Democrats running for re-election next month from stopping it -- was a federal ban on banking institutions knowingly transferring funds to businesses or individuals that may conduct gambling operations in states and areas where gambling is prohibited.

It isn't an outright gambling ban, or "prohibition," but for several of the world's online gambling casino operators -- most of whom, curiously, reside outside the US -- it may as well have been. One key reason is that the law now mandates that banks work out some type of transaction security system within the next nine months, that can electronically block funds transfers to institutions on a blacklist.

Even though this list may include certain online casino operators in this specific case, the technology could very well be extended in the future to apply to any kind of suspect organization, including potential organized crime or terrorist sources.

During this week alone, five more British-based firms -- Leisure & Gaming plc., FireOne, Fairground Gaming Holdings, Sporting Bet, and BetCorp -- announced their exit from the US gaming market.

Previously, the transaction ban was a bill unto itself, though it had been held up by significant opposition. A successful strategy late last month by Senate Majority Leader Bill Frist (R - Tenn.) succeeded in getting the bill attached to a terrorism security bill that no one wants to be seen as openly opposing, at least this close to an election.

Ironically yesterday, in a clear indication that, these days in the gaming business, you can't win for losing, the European Commission announced it is opening an inquiry into whether member nations are restricting access to their Internet gaming markets. Under EU law, it is actually illegal for a licensed business based in one nation not to conduct operations openly and fairly with other nations, even if that business is gambling.

Some of these European operations are state-owned, such as national lotteries, some of whose business is conducted online. If a European-based gambling firm or agency wanted to conduct online business legally under the new US law, it would need to implement the electronic protections yet to be devised, which would protect them from transacting with someone within a US state or territory where gambling is prohibited.

Under EU law, a member nation cannot prohibit or restrict citizens' access to any form of gambling, if at the same time that nation runs or sponsors its own lottery. France is one such state, and is one of the major centers for Internet-based gambling in Europe. Yet French authorities recently arrested executives of a Monaco-based gambling firm after they set foot in French territory, ostensibly for "violation of French gambling laws."

In the name of eradicating state-held gambling monopolies, such as those that EU commissioners claim exist in France and six other nations, lawmakers are pushing for new regulations which would mandate that state-owned and private gambling firms (those that remain) cannot withhold service to their customers based on where they're located.

As a result, quite conceivably, if these firms actually do implement the specific electronic protection measures the US law mandates, they may actually come under scrutiny by the EC, and could face penalties. Suddenly, the fact that those British firms are discontinuing their business in rapid succession, makes more sense.

Comments

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Iam appalled that something like this could past. I am quite capable of controlling my spending habits. I work two jobs and if I want to play a little bingo on line at the end of my 18 hour day I feel I have every right to do so. I can withdraw money from my bank account and go to Dover, Delaware and gamble or Atlantic City but I can not sit in the comfort of my own home and play bingo on line. Tell me how you justify this. The bill itself may have been acceptable except that way it was attached to a non-related bill is typical of the way the government acts, back door, I think it stinks.

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I think this bill is Outrageous. It is one more example of the government encroaching on our rights as an indivdual. This bill has little to do with gambling, persay, as it does not address off track betting, bingo halls, government sanctioned lotteries or day trading and investing in the stock market in general, where this administration would be more than happy for you to gamble away your social security. This bill is about the current admin. fixation on legislating the morals of the religious right, their voting base. It is one more example of the American people losing their liberties and freedoms, right by right, inch by unoticalbe inch until we wake up one morning living in a totalitarian state! Hail King George!!

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Simply put: Americans are loseing their rights. I enjoy playing online and have not lost any money.I don't think this will work, anybody that wants to gamble badly enough will find a way. I predict a lot of people getting ripped off.The legitimate companies will not allow transactions comeing from the United States but crooked ones will. Bill Frist, I despise the way you attached that to a terrorist bill, that's the same way that income tax came....on the back of an unrelated Farm Bill.

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We are the voters this includes the congressmen and legislators and if this is how we are going to run this country then we are sure to fall.

"Who ties your hands?"

If the government would have explained their position clearly instead of sliding it under the door I believe most of us would have backed the idea. But now we only question their actions and not their intentions. I for 1 was opposed of the whole thing being that I am one who will be more restricted but in learning more of what they are trying to do I am a little thankful that they decided to step in.

On a final note it is our choice on what to spend our money on. I dont agree that it is considered illegal in most states but not all(just what is that telling us?) But I do agree that other contries shouldnt be banking on it, therefore, Why arent WE banking on it???

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"Of course, they could have waited until Las Vegas shuts down because everyone is spending money on a North Korean Casino which helps fund the Uranium enrichment, but they decided to prevent that type of thing from occurring. Yes I know, that is not happening and it is quite a stretched example--but if gambling drives the economy in Nevada and Louisiana, you better believe it could drive the economy of terrorist countries".....

God, this is truly comical. You sound just like some of those naive Senators whose pockets are lined. You seem to omit in your ridiculous statements that 95% of these companies are run by the US's biggest ally England.

Better yet, why don't we just have a communist state where we could only buy goods and services from within our walls!!! And who is our Government to say which foreign companies/products it's citizens are allowed to purchase from? And don't give me some crap about it's "illegal" or immoral. It's only illegal because of big business backers like vegas, much like why Marijuanna has been the scapegoat for years by the Tobacco industry. This poker ban and state of illegality is the same thing.

I'd hate to sit in my favorite Italian Restaurant, flip through the Wine list and find that I no longer could order a bottle of Multipulciano d’Abruzzo because it was imported from "potentially" a mafia driven vineyard, and that the only wines available now are from California, Washington, and Oregon. And yes, these types of restrictions put strains on our freedoms.

I love your condescending tone as well, shows how simple minded you truly are. Thanks for the entertainment.

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I love your comments bourgeoisdude, simple thoughts from a simple mind.

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I don't particularly agree with gambling - but how obscene and corrupt is the US legal system that you can tag an amendment relating to gambling onto a bill relating to terrorism. Absolutely disgusting.

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No, just another IOWEU to a major corporation!

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Yet another example of fundamentalist Evangelical cult members imposing their so-called form of Christianity on the rest of the nation.

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I have heard there is one site already providing information on how to get around the restrictions. http://ipinfo.shoq.net.

What really amazed me was that a gambling site rumored to be tied to the russian mafia, stopped serving US customers, http://fonbet.com

The next question on my mind, is how this will affect the poker rooms. Do you thing this will offer an alternative or will the online players stop playing altogether? - and yes, I am a poker dealer at the Avi Casino in Laughlin.

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...

On-line gambling is right up there with
on-line prostitution, software piracy, and
file sharing !

The State has a vested interest in protecting
the morals of it's citizens. This being a
widely-recognized principle of Law.

...

The PC Rat

...

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Good analagy, but not of the law mentioned here. This law isn't about a morality thing at all. I am personally not a fan of gambling myself, but you've missed the point.

Again people, this is only banning people from gambling US money with foreigners. What could potentially happen very soon (if it hasn't already) is terrorists/North Korea/any outside countries could be basing their economy off of people gambling it to them from US soil. Online gambling always favors those whom run the servers--whether the gamble is actually with another "individual" or the web site itself. I personally believe people ought not waste the millions of dollars that they waste at the casinos in Las Vegas...but far worse than wasting it in Las Vegas would be wasting our money at casinos in North Korea!

Read the article again:

"During this week alone, five more British-based firms -- Leisure & Gaming plc., FireOne, Fairground Gaming Holdings, Sporting Bet, and BetCorp -- announced their exit from the US gaming market...lawmakers are pushing for new regulations which would mandate that state-owned and private gambling firms (those that remain) cannot withhold service to their customers based on where they're located...As a result, quite conceivably, if these firms actually do implement the specific electronic protection measures the US law mandates, they may actually come under scrutiny by the EC, and could face penalties. Suddenly, the fact that those British firms are discontinuing their business in rapid succession, makes more sense." (emph. added)

That says it all.

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If the State has some "vested interest in protecting morals" then how would this be different then the Taliban, or the whackjobs in Iran?

I say no to the ruin of our freedoms from those who want to regulate morality, either from the extremist Christians, the extremist secularists or the Taliban and their Shria law.

Which is more immoral, someone who uses the internet to gamble or someone who uses the Government to force their own morality on others?

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The four things you say are at the same level of morality or very incorrect. True online gambling and online prostitution both envolve someone going a step further.....the use of real money and the fact that for prostitution to exist, people must physically meet. Software piracy and file sharing (specificly file sharing) are virtual. This in itself makes your comparison incorrect. Don't forget, without the sharing of files, the net doesn't exist. This whole thing is designed and built around sharing files form one pc to another. This is also the primary point to networking. If we're going to agree the sharing files isn't moral, then we must also agree the the existance of the internet isn't moral.

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The State has a vested interest in protecting
the rights of it's citizens.


Fixed.

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Go away.

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It's hypocrisy at its best. A real politician class act. Gambling is illegal already. What is the message here? reinforcing that illegal thing are illegal? The trasactions are illegal from an illegal thing?

Pathetic and absurd...

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What exactly is hypocritical about banning online gambling, if offline gambling is already illegal?

I believe the word you're looking for is redundant, not hypocritical. Even then, this isn't redundant, because gambling laws are created and enforced at the state level, and the states can't regulate the internet (commerce clause of the Constitution, read it sometime.)

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Gambling is not illegal on a federal level or else Las Vegas and Atlantic City wouldn't exist. It may be illegal in 48 states, but not on a federal level. In fact I would like you all to come and lose as much money as you can in the casinos here in Las Vegas. It keeps me from paying a state tax. My main objection is this is something that got tied into the port security bill. What does port security and internet gambling have in common anyways. They should pass a law that makes lumping all this stuff into one bill illegal.

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If gambling was illegal, we wouldn't have so many states envolved in a state run lotto. Casinos would not be allowed to exist either. If gambling ever did actually become illegal, noone would have much of a reason to goto Nevada.

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Xuvious:

They don't want to ban gambling. They just want you to do your gambling in Vegas or Atlantic City, where the revenue stays in the US.

Does anyone else have a problem with a senator attaching an unpopular bill to something that is political suicide if you are against it?

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If you ban "gambling" then you have to also ban investing in the stock market. They are both the same thing, if you are against gambling then how can you justify the stock market?

In the end it's personal freedom that is lost here. The Repulicans prove once again they are no different then the Democrats, in that they both crave more Government (power) and more intrusion into our lives. I say give Libertarians a try, cause if you keep voting the way you've always have....you'll keep getting what you've always gotten, legislation like this.

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"If you ban "gambling" then you have to also ban investing in the stock market. They are both the same thing, if you are against gambling then how can you justify the stock market?"

Investing in the stock market is not the same as gambling. They are two totally separate things, and I wonder about your mental state for actually equating the two.

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"They are two totally separate things, and I wonder about your mental state for actually equating the two."

Actually he has a point there. The stock market for many people is a "gamble" in that you are spending money with the potential to get more return, or risk losing it. I follow that line of thinking, although it is technically not the same as the 'gambling' as far as the legal term.

It's that he somehow equates the law in question to mean Bush has signed a "gambling ban" that he doesn't understand. It's about gambling with foreign companies, not gambling using that old slot machine at 7-11...

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"The stock market for many people is a "gamble" in that you are spending money with the potential to get more return, or risk losing it."

Sorry, there aren't any parallels between the two, and I seriously wonder about the world view of people who say the two are equitable. I'm presuming the equation comes from describing both as "giving your money to someone else with the promise of getting more back," but that's an extreme oversimplification of both stock investment and gambling.

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The stock market may have at one time been about investment; but it isn't any more. It is a gamble. It is a never ending horse race where you bet which horse is going to cover the most ground from moment to moment. The horse starts slowing down, you jump to the horse that is speeding up. How do you see them as being different?

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Capitalism? Free markets? Globalization? I thought Bush was all for these things... Well he is, so long as he can make a buck off it, too. Internet poker is not illegal... Funding your poker account from a US banking institution is illegal... There are ways around it... Business as usual.

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"Internet poker is not illegal... Funding your poker account from a US banking institution is illegal... There are ways around it... Business as usual."

As long as the "Internet Poker" is done in a state where gambling is legal, then absolutely it is legal--if the money is kept here in the states.

Since so many people here are misinterpreting this little over-politicised tidbit, let me explain what this is for. The purpose of this proposal is to stop US citizens from spending the money they "gamble" on foreign countries. US money is funding foreign interests, and the US wants to regulate as many financial ties with foreign nations as they can (NOT stop--only REGULATE).

Of course, they could have waited until Las Vegas shuts down because everyone is spending money on a North Korean Casino which helps fund the Uranium enrichment, but they decided to prevent that type of thing from occurring. Yes I know, that is not happening and it is quite a stretched example--but if gambling drives the economy in Nevada and Louisiana, you better believe it could drive the economy of terrorist countries.

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Well it seems to me that our friendly neighbor bookies will be back in business. In some ways organized crime always seems to sink their roots. By creating this ban on internet gambling you increase the desire for those who love to gambling find ways to do so. In the end the government still loses and the people lose because organized crime just got a shot in the arm. There is only one way to stop illegal gambling and that is to legalize it 100%. That my friends was straight from the horses mouth, the people that conduct illegal gambling. You people in Washington should take some advice from Ireland and UK where it is legal. This country would be far better off collecting the tax revenue instead of raising taxes to fix our countries infrustructure. I think many intelligent people would agree.

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The Prohibition Amendment in the U.S. is a classic example of what you're saying. They myopic view of "saving" people from the evils of alcohol gave organized crime the quickest route to wealth and power.

Enactment and enforcement of bans on vice crimes, including alcohol, gambling, prostitution and drug laws have never been anything but extremely expensive, ineffective and and exercise in futility.

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There's nothing wrong with legislating morality, as long as it's done evenly. Heh. You missed this one, Congress.

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All legislation is based on morality.

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Really? I wonder if the Jews living in Germany just before World War II would have agreed with that?

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Godwin's Law pops up again.

But to indulge you: the Nazis considered the eradication of Jews to be moral.

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It would be a refreshing change if we could find legislators to write the laws, who had some morality thsmselves. And even better, legislators who did not exempt themselves from the moral laws they write for their constituents.

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That would certainly be preferable to having the liars, thieves, murderers, and other assorted crooks currently serving, yes.

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Depending upon where you live in the U.S., anti-gambling laws are something of a joke, anyway. I live in a state which prohibits gambling(along with serveral other "immoral" activities, since we're in the "Bible Belt.") Just this month, the state has finally lifted the prohibition on tattoo parlors.

We also have a lot of federal Indian land. As such, there are at least six casinos within 5 miles of my house and I can assure you they are busy all the time. We are at the juncture of three states, also with gambling prohibitions, so we live with never-ending tour buses.

On the positive side, the casinos create a lot of jobs in a town where minimum wage and high unemployment are the norm. On the negative side, I know a lot of people who have lost everything through gambling addiction.

As far as the laws go, the state can proudly proclaim that they do not tolerate gambling. Since I'm not a gambler (no religious nor moral issue, just personal choice), the situation has little to no impact in my life. It just seems like a bit more government insanity, however I look at it.

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This situation has been very obvious to this point, and what is still to come is even more so, but for you naive people out there....read carefully. Las vegas has historically been huge political backers lining Senators and Representatives pockets with gold for many years to ensure certain legislation passes, and prevent other legislation from seeing the light of day.

As it stands, Online Gaming constitutes illegal activity, and Las Vegas can not participate in this 15 Billion dollar a year industry. Regardless that Online Gaming has driven more people to the Casinos and Hotels of Las Vegas, Las Vegas greed naturally wants a piece of the pie. As well, our government has not been able to successfully tax these international gaming companies, so they too want to find their way in. Las Vegas, with the help of the US Government, has now passed a law which cripples the current Online Gaming community, and leaves open a huge market of willing consumers. Short term: This is another case where the US Government has traded millions of American Citizen's freedom for a quick buck. Long Term: Opens a huge window for continued cash flow through taxation.

How you ask? Las Vegas backed senators have already sumbitted a Bill that will legalize online gaming, but as long as it is regulated from one body and taxed. Las Vegas of course will regulate the Online Gaming Industry in the US, and without serious competition, will continue to thrive in both the US economy and the International community.

This is a scenario that we know all to well of the Las Vegas of the Past:The House Never Loses. This is big business at its finest, and there are no two bigger players then the City of Las Vegas, and the Government of The United States of America. Just don't be fooled when it becomes legal and thank our government; remember that it was them who took away your freedoms and your income, and it was them who got fat off of this whole deal. And they will keep getting fatter.

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"Just don't be fooled when it becomes legal and thank our government; remember that it was them who took away your freedoms and your income, and it was them who got fat off of this whole deal. And they will keep getting fatter."

What a ridiculous conclusion. I'm sure you're the same one who criticises companies for outsoucing their technical support overseas. Why is it that the government is so far and between us? Last I looked, the government was elected by the people, not the "them who took away your freedoms and your income".

How on earth can you equate American's "freedom" with supporting foreign interests? The govenment just saved "millions of American Citizens" millions of dollars, and for you to act as if the government is the fatted calf in this game is ridiculous. Bush only has about a year and a half left, and his salary is fixed. Also as you know, the democrats are expected to win several seats in the upcoming elections, so yeah, those greedy Republicans want to stop American citizens from spending all their money supporting foreign interests, and instead send it to the government which will soon be comprised of mostly democrats.

I must admit I've never looked at it that way. It defies logic so much that I would not have ever seen it as such without your genius to show me. Thank you for your blatent disregard for this country and its people, America is in high demand for those who criticise others without actually doing anything to better themselves or their country.

"How you ask? Las Vegas backed senators have already sumbitted a Bill that will legalize online gaming, but as long as it is regulated from one body and taxed. Las Vegas of course will regulate the Online Gaming Industry in the US, and without serious competition, will continue to thrive in both the US economy and the International community."

And this is relevant how? Oh yeah, it's all about politics. Who cares about America's future anyway, right? I mean, it's all about the votes. Those dam Senaters ELECTED BY THE PEOPLE get to decide what we do with our money? Hello! They call that a Republic! We elect those who represent our beliefs...all you are doing as saying you don't agree with the way the people of the united states are voting. But that's what this is about, isn't it? Put labels on people and vote for red or vote for blue, who cares if they give a dam about the country, right?

Ignorance is one thing, but willfull deception is another. Take from that statement what you will--you are an intelligent individual.

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"But attached to that bill at the very last minute -- in order to prevent Democrats running for re-election next month from stopping it -- was a federal ban on banking institutions knowingly transferring funds to businesses or individuals that may conduct gambling operations in states and areas where gambling is prohibited."

Haven't read any comments yet, but let me say this: If the state prohibits it, why would any party be against this? Honestly, it is a little redundant, since gambling in the state is prohibited--and that to me should mean internet, phone, email, slot machine--any gambling in that jurisdiction is illegal. This is basically to close the loophole that lawyers can argue the gambling is happening on a "server" in Nevada or something, I suppose.

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I think because while states can make laws, they would ALL have to make laws. Only Washington state made it a felony. But the problem is that the state of Washington also sanctions casinos and cardrooms, and not just on reservation land. They run a lottery, horse racing (and you can bet online for that!), and they sanction more gambling than you can shake a stick at. It's just the impossible-to-tax internet gaming they want to restrict.

So for your jurisdictional point, it's not a simple answer. By federally banning banks from transacting with a known wagering entity overseas, it makes the banks enforce the law.

Frankly that's the worst part of this. Leave it up to the banks. For as much taxing, spending, and legislating the Bush admin. has done, I'm thoroughly convinced this guy was never a conservative. His principles are based solely on family pride, power, and effecting his personal morality on this country. This is an extension of it.

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"For as much taxing, spending, and legislating the Bush admin. has done, I'm thoroughly convinced this guy was never a conservative."

He is indeed far more left-winged than I ever expected him to be, I admit--nonetheless, he has lowered the national debt, so it seems he is "spending" either isn't as bad as dem's would make it out to be, or perhaps for all the spending he is doing, he is cutting other areas. What say you?

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This may even be step 1 of the plan. Step 2 allows firms to accept US players (and everyone else!) if they operate from inside the US. It's an easy equation, which politicians know the gambling operators know - pay higher taxes and still make bigger profits than you will now that we've passed this law. So it's then freedom to choose, rather than being forced. Which do you think they'll choose? But if you forget you've lost your gambling rights, you'd have to say this is in the interest of the country. Better economy, maybe more jobs if 'Step 2' happens. Then everyone's happy again, except the less wealthy countries that are already losing because of the new law. Even more so if 'Step 2' happens. Help some countries with one hand, slap some around the face with the other.

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I wish the US was more like Canada. I think there would be fewer problems if drugs were easier to use, gambling wasn't a crime, and the leaders are accountable to the people. ...blah blah blah....

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" think there would be fewer problems if drugs were easier to use, gambling wasn't a crime, and the leaders are accountable to the people."

The last one I agree with, the second one is debateable, and the first one is an argument that had I written a book explaining both sides, we would still not be any closer to agreeing about it (we meaning it would still be 50/50 or 60/40 in whether we "should" regulate or not.)

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Instead of wishing the US became more like Canada, why don't you move there?

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The poster could be too poor to afford the move, uncertain as to what steps (if any) need taken to obtain residency and work, uncertain of the job market, not want to move that far away from family, or jsut plain hoping things in the US get better again.

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Complete trash. Govt telling you what you can and can't do with your disposible income? And to tie gambling in with terroism?!?! Give me a flippin break!!! 95% of Washington has gambled before.

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If you can't tax it, make it illegal. Hypocrites.

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So by that logic the internet should be illegal?

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Lord knows, if some people had their way.

I don't even what to think of what the world would be like.

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The key line is "most of whom, curiously, reside outside the US" - every day of internet gambling takes more money from the US and places it in Costa Rica, Australia, Gibraltar etc. That's the reason, not to help problem gamblers or any other weak excuse. It doesn't even hurt me, being in the UK, but it's wrong in my opinion. They're hurting you for their own interests.

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Nevermind that gambling is already illegal except in certain circumstances (state lotteries, dog/horse racing, Las Vegas, Atlantic City.) Your complaining is pointless, especially the charge of hypocrisy.

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