LAS VEGAS-Prohibition doesn’t work. As our history books show, the Volstead Act, prohibition of alcohol in the 1920s, closed the doors of legal, regulated businesses and opened a Pandora’s box with unintended consequences.
These consequences-criminal activity, illegal manufacturing and distribution, and more-took years to combat and significant resources. All for the act to later be repealed.
Let’s not let history repeat itself. Americans enjoy entertainment, especially gambling. Gambling is woven into American history, having existed in some form since our nation’s establishment.
Let’s rely on common-sense safeguards and consumer protections by extending some well established and effective gaming regulations.
Naively assuming a ban would dissolve Americans’ interest and participation in online gaming sets up local, state and federal law enforcement with tremendous expenses and turns millions of average American citizens into criminals.
The black market exists. Today’s unregulated online operators are flouting their products in clear violation of state and federal law with no regulatory controls or tax obligations.
Estimates show growth in unregulated online gaming markets is explosive. An estimated 1 million Americans or more spend nearly $3 billion annually on overseas gaming sites. Most of these Americans aren’t criminals; they’re simply looking to participate in the newest form of gaming-online.
The U.S. should harness this practice, not vilify or ignore it. Moreover, the billions of dollars this new form of gaming technology generates presents a healthy funding model to cover costs associated with regulation and legal enforcement.
Moreover, when properly implemented, the tax revenue generated through online gaming can cover not only the necessary expenses to ensure consumer protections for Americans but also support local communities’ budget deficits to pay for essential public services such as education.
It’s no secret that many state and local governments are woefully in need of new revenue streams. Online gaming holds the potential to assist with these budgetary shortfalls.
State lotteries are a perfect example of leveraging long-standing entertainment to help subsidize public-sector treasuries. However, the large number of states that have kept up with 21st-Century technologies by offering an online lottery would also be jeopardized through wide-sweeping federal prohibition.
The slippery slope of a proposed ban doesn’t stop at the state level. The Fantasy Sports Trade Association was recently warned that popular sports fantasy leagues could end up banned by this legislation as well.
It wouldn’t be surprising if other forms of popular online gaming-through social media channels such as Facebook and others-were brought under scrutiny through federal prohibition, too.
America is well known for its entrepreneurs. Innovators like Henry Ford, Bill Gates, Steve Jobs and others are as tied to American history as U.S. presidents and policymakers.
Let not federal government impede innovation. Set up the parameters to let Americans innovate-and play-on a level playing field with the rest of the world.
Instead of pretending that innovation and the internet don’t or shouldn’t exist, America should look back to both our historical mistakes and our historical innovations for inspiration on how to best navigate the challenges and opportunities associated with internet gaming today.
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Mark Lipparelli is the founder of Gioco Ventures and former chairman of the Nevada State Gaming Control Board. He serves as a consultant to the gaming and entertainment industries.
Editorial, Pages 16 on 02/08/2014