So iGaming has had its Black Friday. About time I say. The bottom line is, this should have happened four and a half years ago. Pokerstars, Full Tilt and Absolute Poker are but a few of the operations flaunting the UIGEA regulation, continually angering the US federal authorities. It seems, finally, that the FBI have finally found the backbone on the wet kipper these poker operations have been slapping around their faces for such a long time now.
The fact remains that outlawing online gambling is, on the whole, an unpopular decision amongst US voters. Sure, there is certainly a large school of thought against gambling and its voice is significantly more powerful than those wanting to throw their money into online poker and casino betting, but it is certainly smaller in number.
Playing or offering online poker and, more widely, online gambling is not a crime in my eyes, or in the eyes of the vast majority. For some, it is a problem and that needs to be handled with respect, and perhaps Pokerstars, Full Tilt and Absolute Poker have been lacking that in abundance over the past four and a half years. Before I set sail properly on the analogy I wish to make, I do not wish to imply that the actions of Messrs Scheinberg, Bitar, Burtnick, Tom and Beckley are akin to those of a mob. They are simply businessmen who have been successfully finding loopholes in regulation to provide entertainment to people who are crying out for it – notwithstanding the rewards they have each individually accrued as a result.
On with this analogy. The following ditty was recounted by Edward, Prince of Wales to his father, King George V, in 1919 and refers to Americans popping over the border to Canada during the prohibition era:
“Four and twenty Yankees, feeling very dry,
Went across the border to get a drink of rye.
When the rye was opened, the Yanks began to sing,
“God bless America, but God save the King!”
Pretty much sums up how things have been for American gamblers these past four years, though I doubt Prince Charles or his mother would risk laying claim to Full Tilt’s Irish headquarters and may even get a few frowns from the Isle of Man.
The late 1920s saw the era of alcoholic prohibition in the United States become more heavily enforced. The more it was enforced, the harder the criminal underworld rebelled against it to turn an even greater profit. The public popularity behind their work to keep speakeasies open was huge and contempt for the ban on alcohol grew. Eventually, President Roosevelt caved in to popular opinion, in a time where financial depression was rife, and repealed the Volstead Act during his First Hundred Days in tandem with his New Deal reforms.
Roosevelt’s New Deal for the American people quite simply would not have worked had he not repealed prohibition. It gained him crucial support in the cities and allowed him leeway on increasing taxes to aid the economic recovery. (A message for Mr Obama as election time looms, I wonder…). By this point, the prohibitionist movement had all but died out and its efforts to rid the nation of the ills of alcohol had been deemed a failure. That said, a legacy of the movement’s efforts, wanted or unwanted, was put in place.
One part of this legacy was the need alcohol marketeers had to attract new clients. One notable group of new drinkers were women. Those who were not in support of prohibition could drink in the new semi-public environment of speakeasies. This was a result of the masculinity of drinking being reduced as a result of the saloon dying out and the norm of women drinking in public was much more acceptable.
Heavy drinkers and alcoholics were among the most affected parties during prohibition. Those who were determined to find liquor could still do so, but those who saw their drinking habits as destructive typically had difficulty in finding the help they sought. The self-help societies had withered away along with the alcohol industry and in 1935 a new self-help group was founded: Alcoholics Anonymous.
In effect, prohibition had widened the market for alcoholic drinks, but had at the same time been responsible for the founding of one of the most successful self-help organisations the world has ever seen. Lessons to be learned here, if and when online gambling becomes regulated in the United States – there can be a happy marriage between those wanting and those not wanting gambling to be legitimised.
Once the decision to repeal prohibition had been made, Roosevelt’s government simply could not let off those who had profited from flaunting prohibition. The feds continued to pursue the likes of Al Capone and Bugs Moran until finally building a strong enough legal case to bring them down, in 1931 and 1946 respectively. Their struggle was finding those who were willing to testify against them. In 2011, they found their man to bring down those responsible for flaunting UIGEA in the shape of Daniel Tzvetkoff.
So, nearly 80 years on, have we reached a focal point in the historical acceptance of online gambling, and a point at which enough scapegoats have been made and brought to account for us all to move on with enjoying the entertainment pastime that is gambling online? I guess that is the multi-billion dollar question. I wonder if online poker might form part of an Obama-style New Deal during his forthcoming election campaign…
Tom Galanis 
Your article, while amusing and somewhat interesting in as much as it recounts the rise and fall of the last prohibition, misses a number of vital points.
1. Despite what the DOJ and in particular NY seem to think there is no clear case against online gambling. At best it is murky and intertwined with state law.
2. The DOJ set a new precedent here by interfering with the root name servers of the Internet in order to “seize” these domain names, in advance of any legal findings by a court of law. In doing so they not only threw away any concept of “innocent until proven guilty”, making a mockery of the US judiciary, they also made it clear that they consider the entire internet within their control. Don’t think that you are safe with a .eu domain name – all TLDs go through the same servers at ICANN and what the DOJ has shown here is that they can and will interfere with the registry without any judicial process and leaving the victims with little redress. Pokerstars had a large legitimate business outside the US which was decimated by this action. Regardless of whether they had transgressed some US law the US DOJ had no right to turn off their servers to individuals in other countries.
3. The DOJ has never yet won a case against a party offering remote gambling from outside the US. They have employed coercion and bullying to extort large settlements from companies such as Neteller but never yet gone to court and won in a case on remote gambling. Furthermore, in the only non-sportsbetting case to go to court to date (Mastercard) they lost, the court declaring that the wire act (and by extension UIGEA itself) did not apply to casino gambling.
From my perspective I would welcome some clarity on the whole issue – by all means outlaw what Pokerstars et al are doing and then enforce the new, clear law. But I do not condone this bullying and disregard for the judiciary that is contrary to the constitution and very cornerstone of the American free society. While the law is ambiguous the efforts should be put into writing it correctly, not allowing an enforcement agency to effectively write its own version of that law and then “enforce” it. That is not how a democratic America is supposed to work!
Fair points Adriaan