Cronyists, Fake Libertarians, and Poker Regulation

Often times in politics, we assume a very simple us-vs-them battle, where there’s one side of good guys looking to shrink government, and another side of bad guys looking to expand government.


However in the case of online poker, it’s a three-cornered fight, and the two sides getting the most attention are both after big government, even the side pretending to be libertarian.

Presently there is little federal law with respect to online poker. Online sports betting is prohibited federally by the Wire Act, though states like New Jersey have weighed challenging the limits of federal authority to ban intrastate gambling. Beyond that, the feds also ban bank transactions in support of gambling activities that are banned, which in the case of poker primarily relates to state-level bans.

However there are two groups of people who want to change that. In one corner you have Sheldon Adelson, casino magnate, who is leading efforts to impose a blanket, national ban on online gambling. Online gambling is a big competitor with live casino gambling. Adelson’s position amounts to getting the government to ban his competitors. This is the typical cronyist stuff we see all the time in all sorts of industries. It’s the online version of taxi drivers versus Uber.

Then you have another group, led by the Poker Players Alliance. They hold themselves up to be defending the small-government, libertarian position, however they’re actually pushing for another big government stance. While Adelson would like to ban new things, PPA wants to create a whole new federal regulatory bureaucracy claiming supremacy over current state bans or regulations. Regular readers of Tech at Night know the last thing we need is another unelected, unaccountable regulator!


In the middle between these two groups, the opposing self-interested groups both looking for government to take their side, you’ve got the third corner of this fight. Simple conservatives are the ones who would rather the feds completely stayed out of this fight, and left gambling issues to the states, which traditionally have made these decisions.

Right now the states can decide for themselves whether to legalize online poker or other gambling. New Jersey’s gone one way with active intrastate gambling online, and Washington state went the other way, being one of the first states to ban online poker. This is federalism in action, and there’s nothing wrong with that.

The insistence that there must be some new legislation is the bias that the proponents of big government always have. As Calvin Coolidge famously pointed out, sometimes the best course of action is to stand by and do nothing. In the case of online poker, Coolidge was right. We’re all better off if the feds leave well enough alone, and let the states handle it, instead of growing DC in size and scope once again.


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