60 Minutes Internet Gambling Feature: Government Missing Opportunity, Kyl is Clueless

60mins_1“There’ll be more online poker games per day at the end of this year than all of the casinos in the entire world put together. It’s a huge business.” РNigel Payne (pictured right), Sportingbet

60 Minutes aired a surprisingly informative (for the masses) and mostly balanced feature on Internet gambling last night.  Anchored by Leslie Stahl, it exponentially exceeded the Dan Rather fluff piece on poker players earlier in the year.  Then again, exponentially exceeding anything Dan Rather does isn‚Äôt exactly a Herculean task.

Here’s what we learned:

Jk_ua_bio 1) Senator Jon Kyl (R-Ari) should move to the Carolinas.  Clearly out of touch with the common man, Senator Kyl has proposed a bill to crackdown on the ‚Äúsocial pathology‚Äù that is Internet gambling. Despite that an estimated 50 million Americans play poker and, according to Nigel Payne at Sporting bet, 12.5 million gamble online, Kyl has taken it upon himself to dictate what is right and wrong for a vast number of adults in our country.  Kyl says, ‚ÄúIt‚Äôs so easy to do. It‚Äôs so easy for kids to do. It‚Äôs so addictive. And it has frequently been demonstrated that there‚Äôs a lot of graft and corruption in this.‚Äù   No proof of this statement or studies to back-up his claim were provided.  However, 60 Minutes did have the 16 year-old son of the segment‚Äôs producer attempt to sign up for a site (ParadisePoker, owned by Payne’s company) using his dad‚Äôs credit card.  While he couldn‚Äôt get on ParadisePoker.com or a second "reputable" site, he was able to register and play on a third site.  So essentially, Senator Kyl‚Äôs bill is to protect 16 year-olds who steal their dad‚Äôs credit card.  Or put more accurately, it‚Äôs to protect shitty kids. 

In case you were wondering, and this wasn‚Äôt mentioned in the 60 minutes piece, Kyl‚Äôs home state of Arizona has a lottery that contributed $116.4 million in net profits to the state.  Note the hypocrisy, as we‚Äôre pretty sure underage kids are buying lotto tickets in his own state.

2) No taxation because there’s no representation.  Nigel Payne, a Brit, calculated that the U.S. government has lost out collecting approximately $1.2B in tax revenues by not regulating gambling.  Brilliant!  He later pointed out, ‚Äú‚ÄúDo you think the Internet‚Äôs suddenly going to go away? So what are we going to do in ten years time, when this industry is ten times bigger than it is today?  I often say to people, ‚ÄòPlease give me one solid plausible argument why you shouldn‚Äôt regulate it.‚Äô‚Äù  Well, Senator Kyl would respond by saying, ‚ÄúBecause shitty kids are stealing their dad‚Äôs credit cards.  Did I mention my state runs a lottery where your odds of winning are infinitely lower than gambling on almost anything online, espeically poker, which is a game of pre-dominant skill?‚Äù

3) Internet gambling = big business.  Sure, we knew this already.  But it’s really the volume that stands out.  Internet gambling sites are raking in $10 billion in profit this year, of which 80% of their comes from the U.S.  Did we mention the amount of money the U.S. government is missing out on ($1.2B, estimated) by not regulating Internet gambling yet?  That‚Äôs why Terri Lanni, the CEO of the MGM/Mirage says, ‚ÄúI think the issue is very simple: that you should license it, regulate it and tax it.‚Äù  Or as WPT founder Steve Lipscomb points out, ‚ÄúThey keep the legitimate companies out of the business, and all of that goes to offshore companies that in no way can be regulated‚Ķ. or taxed.‚Äù

Some closing thoughts… Hat’s off to 60 Minutes for attempting to show both sides of the argument.  While some of the claims by Senator Kyl were not validated (let’s see the proof), Stahl and the producers managed to balance out his opinions from some reputable, well-informed sources (Lipscomb, Lanni, and Payne).  With the continued rise and interest in Internet gambling, we can be sure that this issue will not go away soon.  But hopefully, as poker in particular continues to gain mass acceptance, the Government will come to their senses, realize the revenue opportunity they’re missing out on, and legalize/regulate Internet gambling in some form. 


4 Responses

  1. Chops

    November 22, 2005 6:27 am, Reply

    It’s illegal to operate an online gambling site within US borders, yes. Actually gambling online…there’s still some gray area. Kyl’s bill cracks down on the use of credit cards and your bank account to transfer funds into online gambling accounts.

  2. snake

    November 22, 2005 2:02 pm, Reply

    chops, thanks for taking the lead on this review of the 60 minutes broadcast but i have to say I’m surprised there was no attempt made at a “Raising Arizona” reference, considering Kyl is from that desert state. Remember, we must strive for far-from-clever poker metaphoratopia like no others. If the other senator from that desert state chimes in, please be sure to use something along the lines of McCain in the Membrane: McCain ‘McCalls’ Kyl’s Raising of Online Poker’s Illegality and Seeks to Fold Offshore Poker Companies.

  3. cgpop

    November 23, 2005 6:16 am, Reply

    I thought it was legal to carry poker but if you try and sell it, that’s illegal. But I also heard that none of that shit matters, because the cops in Amesterdam, they don’t really give a shit. What were we talking about?

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