by Matt Blumenfeld

Created on: July 03, 2007

OK, it may not be the very latest word, but if you've been following the news lately, you already know that a new federal law has been passed to stop U.S. banks from handling transactions related online gambling. Although it doesn't actually make it illegal to PLAY online, the effect is pretty much the same since you can't move money into an account to play. There's sure to be some debate about whether poker should be lumped into the "gambling" category, since it's pretty well-documented that there's a skill element to the game. I believe that the ultimate outcome of this fiasco will be that online poker is legitimized and poker servers will be set up within the United States. That would serve a number of purposes.

First of all, it would allow some regulatory oversight to take place. Besides keeping the games fair, that should also put an end to concerns about online poker funding terrorist efforts abroad. (Hey, *I* didn't tack this legislation onto the tail end of a port security bill!)

Second, it would keep millions of Americans from participating in activities that are illegal under Federal law. Nobody is sure of the number of U.S. citizens playin poker online, but it is safe to say that the number is in the tens of millions. I've seen the number 70 million bandied about, and that seems like a reasonable, perhaps conservative, number to work with. As was seen in the days of Prohibition, senseless laws like this can easily have unintended consequences. In the days of Prohibition, mob violence became pronounced as the profitability of trafficing in illegal alcohol became apparent. Although there must have been some citizens that felt bound by the law, many more thought that it was an illegitimate encroachment on their rights and simply ignored it to the best of their ability. There's no reason to believe that this won't play out in much the same way. Once people get used to breaking the law in one area, it becomes much easier to break it in others, at least in my opinion.

Finally, regulation of online poker would allow the U.S. government to collect taxes on poker operators' profits. Because the numbers are so closely held, it's not clear exactly how large a windfall this would amount to, but it would almost certainly be a significant sum. I'm pretty certain that would be an acceptable option for many businessmen, both in this country and abroad. In fact, it would be rather surprising to discover that there wasn't a keen interest by American businesspeople in operating an online poker room if the legal issues could be sorted out.

Until this whole thing is sorted out, it's likely that many Americans will end up playing in home games (legal or not), land-based card roooms and in freeroll poker tournaments online. It should be interesting to see the various strategies the existing online poker operations use to keep people's interest as they lobby for legislation that allows Americans the right to participate in their games again.

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