Cringely on Internet gambling

Over at PBS, Robert Cringely has a very thoughtful article on the recently passed Internet gambling banning law. Naturally, Cringely makes sure to jump on the “It helps the terrorists!” bandwagon, which is a nice touch, I think. I’ve been reading his columns (for every ‘him’ that has made up Robert Cringely) for nearly 15 years, and it’s articles like this one that keep me reading.

Settle in there. This is a long read.

Last Saturday the United States Congress passed a port security bill that carried an amendment banning Internet gambling. This was a huge mistake, not because Internet gambling is a good thing (it was already illegal, in fact), but because the new law is either unenforceable or — if it can be enforced — will tear away the last shreds of financial privacy enjoyed by U.S. citizens.

First, note that he points out that Internet gambling was already illegal (see Google answers for more details on how/why this is). But our fine leaders in Washington are never ones to pass on giving us new laws, it seems. My theory is the more laws, the more easily they can attach amendments for things we don’t like without us noticing. But I’m just cynical that way.

Ironically, many of the senators who voted for this legislation may not have even known the gambling bill was attached, since it didn’t appear in the officially published version of the port bill. But such ignorance is common in Congress, along with a smug confidence that people and institutions can be compelled to comply with laws, no matter how complex and arcane. The amendment was a surprise late addition, pushed by Senate Majority Leader Bill Frist, who has presidential ambitions and reportedly sees this battle against Internet gambling as part of his eventual campaign platform.

Hey! Maybe there’s something to my more laws/more amendments theory after all! Cynicism FTW!

What the new law actually tries to control is the payment of gambling debts through the U.S. banking system, making such practices illegal (except, of course, for intrastate gambling, which probably means your state lottery). Once President Bush signs the bill, your bank and credit card companies will have 270 days to come up with a way to prohibit you from using your own money to pay for gambling debts or — though far less likely– to keep you from receiving your gambling profits. The law covers not just credit card payments but also checks and electronic funds transfers.

So get to gambling before the banks figure out how to stop it.

From here, I’ll skip lots of good analysis and details and get to the end. You really should read the article, though. It only takes a few minutes. If you had read it instead of my write-up of his write-up, you’d probably be done with his now. So go. I don’t mind if you skip the finale here.

Just off the top of my head I can think of several possible approaches to subverting this new law.

. . .

Any random group of 535 nerds is smarter than the 535 members of the U.S. Congress and able to circumvent ANY regulation if there is enough profit incentive to do so. Well the U.S. Congress has just created such an incentive where there was none before. And once these various payment schemes start appearing, what’s to say some of them can’t be equally used to finance terrorism? Of course they can be used for that purpose. Thanks a lot Senator Frist.

Here’s a law that purports to end Internet gambling but will instead enable it, a law that is intended to make certain types of financial transactions harder to do but will ultimately make them easier, a law that says nothing about terrorism but will ultimately abet it, making us all less secure in the process.

There is, to my knowledge, no center for Al-Qaida hacking, nor is terrorism as an industry big enough to attract much third-party software development. But ally the interests of terrorists and Internet gamblers who all want to be paid, that’s a $20 billion incentive to corrupt the world financial system — an incentive that didn’t exist before last week.

And what will be our institutional response to these obvious flaws when they come to light? More regulation of course! More scrutiny of financial transactions, not less. But as we’ve seen in recent years, this greater scrutiny often comes with lax or unequal enforcement, depending on your campaign contributions.

Once again, Congress is proposing to regulate something it ought not to — something that in any practical sense is probably beyond its power. And the result will be only bad, not good. And Congress’s response will probably be even more regulation, not less. And all this to push one man’s presidential ambitions?

There ought to be a law against THAT.

Catch the emphasized political justification he covers at the end, there, too. Just in case you forgot why this would be passed.

[tags]Robert Cringely on Internet gambling, Law makes illegal act illegaler (yes, I made that word up) – gives incentive for industrious to subvert law[/tags]