Online gambling meltdown

by Henry on October 4, 2006

The “FT”:http://www.ft.com/cms/s/ea2a206c-51e4-11db-bce6-0000779e2340,dwp_uuid=e676331a-4bb0-11da-997b-0000779e2340.html writes about a ‘meltdown’ in the online gambling sector, thanks to new US legislation.

The online gambling sector was in meltdown in the UK on Monday morning, as the fallout from last week’s moves in the US to tighten anti-gambling laws sent shockwaves through the sector. Legislation passed in Washington on Friday would outlaw the processing of bets taken on-line by banks and credit card companies. The act now only requires the signature of the US president to bring it into effect, a move which is expected in the next two weeks. The bill prohibits US gamblers from using credit cards, cheques and electronic fund transfers to make online wagers, and throws the high-risk industry – already damaged by the impact of arrests of executives on US soil – into turmoil. One person in the industry said the bill was an attempt to “strangle the industry through the banks”. Companies based in the UK, Gibraltar and elsewhere are losing billions of dollars in their stock market valuations, because of their exposure to the US market.

People like “Christopher Caldwell”:http://www.ft.com/cms/s/457bddcc-1363-11db-9d6e-0000779e2340,dwp_uuid=e676331a-4bb0-11da-997b-0000779e2340.html take these kinds of measures as evidence that governments can indeed regulate the Internet, protect their citizens from nasty content etc etc. I used to more or less agree with them, but after thinking it through and doing some further research, I’m nowhere near as sure as I was. States are indeed able to use third party private actors as proxy regulators as they’re doing here, by pressing credit card companies and companies like Paypal into service as enforcers. They’ve been doing this for years on the state level (Eliot Spitzer pioneered this). But this kind of regulation-by-proxy really seems only to work well when the proxy regulators have real incentives to do what states want them to do, or when the ultimate targets of the regulation are big multinational companies tht don’t want to get caught breaking the law. But according to this “GAO report”:http://www.gao.gov/new.items/d0389.pdf (PDF) it isn’t that difficult for offshore gambling companies to mask their transactions as ‘legitimate’ credit card transactions if they want to. Credit card companies don’t have either the means or the incentives to prevent this, as long as they _look_ as though they are trying to comply. So if I was to lay a bet,I’d lay substantial amounts of money that the new government legislation won’t put much of a dent in the willingness of US citizens to gamble on the Internet, or in the eagerness of offshore companies to make easy money by catering to this willingness. What _will_ happen is that the currently dominant multibillion dollar companies will lose control of the market to a congeries of small, shadier companies that are much more willing to cut legal corners than large, publicly quoted companies, because they have much less to fear from prosecution (few fixed assets, no corporate reputation to maintain etc).

Attention Must Be Paid

by Scott McLemee on October 4, 2006

The term “wingnut” gets thrown about rather loosely at times. But the life and work of former Representative Helen Chenoweth (R-Idaho) embodied all the richness and flavor that expression ought properly to convey. She died yesterday while bravely defying the nanny-state’s intrusive expectation that its charges wear seat belts.

Some highlights of her career are covered over at The Phil Nugent Experience:

Other Republicans had played footsie with the Turner Diaries crowd, but Chenoweth boldly remained attached to them even after the Oklahoma City bombing, an event that inspired her to the optimistic explanation, “Maybe now more people will listen!” Chenoweth married her admiration and concern for the militia groups with her other big obsession, the unspeakable horrors of eco-fascism. Having denounced environmentalism as a deranging form of religion that was at odds with the separation of church and state, she claimed that the government was using its secret black helicopters to terrorize hunters and protect endangered species…. She also, naturally, called for the impeachment of that awful Bill Clinton, but publically declared her support for her kind of world leader, Slobodan Milosovic.

Chenoweth was not simply another opportunist signing onto the “Contract with America” in 1994. “She was,” as Nugent puts it, “a 100% true believer, too radical to ever really accomplish anything and so sincere that you always knew just where you stood with her.”

The Dependable Hugh Hewitt

by Belle Waring on October 4, 2006

Searching for a ray of light in the Foley gloom, Ramesh Ponnuru points us to a voice of calm:

Hugh Hewitt [Ramesh Ponnuru]
The House Republican Conference is sending around his take on Hastert’s role in Foley-gate.

Kathryn Lopez responds:

re: Hugh Hewitt [Kathryn Jean Lopez]
I often assume our friend actually works for the House Republican Conference, or RNC!

You know, when K-Lo thinks you’re kind of a hack…weelllll.

But what do Hewitt’s readers ‘think?’:

Thank you Hugh!
I first read the editorial by Dean Barnett and became “alot” annoyed! I did post my opinion of it on that comment section. So, I was so happy when I read your opinion because , well, it’s shared by me! The truth and facts about the Dim.s sickening dirty tricks are with us and we now have the FBI looking for hopefully truth/facts.

Indeed.

Hey, It’s a Plan!

by Jon Mandle on October 4, 2006

Maybe they should try $40 million. (via Atrios)

Tucked away in fine print in the military spending bill for this past year was a lump sum of $20 million to pay for a celebration in the nation’s capital “for commemoration of success” in Iraq and Afghanistan.

Not surprisingly, the money was not spent.

Now Congressional Republicans are saying, in effect, maybe next year. A paragraph written into spending legislation and approved by the Senate and House allows the $20 million to be rolled over into 2007.

October surprise in Austria

by John Quiggin on October 4, 2006

The Socialists won a surprise victory (or at least plurality) in the recent Austrian elections. The outcome appears to promise a departure from power for Jorg Haider, although the combined vote of the far-right parties was still 15 per cent, which is disappointing.

For CT election-followers, the outcome is of interest in another respect. According to the reports I’ve read, all the polls and all the pundits got this one wrong. So, if betting markets got it right, that would be pretty strong support for claims about the wisdom of crowds. But my (admittedly desultory) scan hasn’t produced any info. Can anyone point to market odds for this outcome?