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Web Gambling; Tax, Don't Ban

Op-Ed

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Location: Washington, DC

By Steve Israel and Peter King

The Treasury Department is charged with a number of law-enforcement jobs - protecting the president, investigating counterfeit money, tracking terrorist financing and more. But now, thanks to a legislative "rider" passed last year, Congress has told Treasury officials to spend their time and resources going after something far more trivial - people who play cards from their home computers.

Frankly, federal law-enforcement officials have bigger fish to fry.

In the final hours before Congress went out of session last October, anti-gambling lobbyists got their "Unlawful Internet Gambling Enforcement Act" attached to our port-security bill. The move allowed their measure to ride the coattails of our vital legislation and become law.

The ban on Internet gambling is misdirected - and it's also probably unenforceable. People will still gamble on the Web, just without the protections that a legal framework could provide to ensure age-verification and protection against fraud. And online gambling now generates $13 billion a year; under the ban, online gamblers won't send a portion of that cash in tax dollars to the Treasury - instead, it'll go to scam artists and gray market entrepreneurs.

The Internet poses new challenges and problems. When the music industry ignored the massive and growing consumer desire to access songs online, a piracy industry blossomed. Similarly, our bans on Internet gambling have been effective only in pushing the business off U.S. shores and out of the hands of scrupulous businesses. By contrast, simply taxing Web betting would generate significant revenues that could be used for a variety of domestic priorities.

Of course, some serious issues need to be addressed. Children, gambling addicts and those who would try to use gambling sites for illicit purposes absolutely need to be restricted from these Web sites. But it is far easier to put in common-sense protections when the industry is controlled by law-abiding businesses than when it operates as an illegal market. Thankfully, technology now allows companies to address these issues. In Britain, where Internet gambling is legal and regulated, technology checks ensure that gamblers are of age and are not problem gamblers; watch lists work to prevent money-laundering.

The Internet Gambling Regulation and Enforcement Act, which we've cosponsored, uses fines and revokes licenses for Web sites that don't sufficiently police against improper use. That's the right approach. Rather than simply repeal the ban on Internet gambling, our Internet Gambling Regulation and Enforcement Act would create a regulatory framework that ensures operators are licensed and protects consumers against underage gambling, compulsive gambling, money-laundering, identity theft and fraud.

In the end, there is the question of how much we want government to be involved in our private lives: For many, playing poker with friends on the Internet is a way to unwind at the end of the day. Technology aside, Web gambling isn't so different than the way Americans have relaxed and enjoyed the company of friends for decades.

Years ago, the Treasury's Secret Service agents used to help Harry Truman put poker games together in the White House. Now they'd be locking him up.

Reps. Steve Israel, a Democrat, and Peter King, a Republican, represent Long Island.

Congressman Israel's op-ed appeared in the opinion section of the New York Post on August 14, 2007.


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