Internet gambling ban under pressure

Rep. Barney Frank, D-Mass., is trying to overturn the current federal ban on Internet gambling.

What's that? You didn't know it was illegal? Well, that's one of the problems. When governments pass toothless laws intended to block voluntary activities that harm no one except the volunteers, governments can end up looking toothless and goofy.

The other problem is that a World Trade Organization panel ruled in March that the United States is violating international trade law by prohibiting Americans from gambling on Web sites based in the Caribbean island nation of Antigua and Barbuda.

In May, the U.S. trade representative responded by blithely declaring U.S. gambling to be exempt from international trade regulations.

Mark Mendel, the attorney representing the island nation in the action, doesn't believe that's going to work.

"One of the frustrating things about our case is that everyone seemed to pretend the United States doesn't have to comply (with WTO guidelines)," Mr. Mendel told a Review-Journal reporter this week in a phone interview from Ireland.

But that's not so, insists Mr. Mendel. "I feel confident that what we will get will be a massive number -- one of the two or three largest WTO awards ever."

Mr. Mendel anticipates a fine in the range of $1 billion to $3.4 billion.

In lieu of the damages, Antigua and Barbuda would be happy to reach an agreement with the U.S. to allow Americans to use the island's gambling Web sites, the attorney says.

Which brings us back to Rep. Frank, who Tuesday admitted his bill to overturn the Internet gambling ban has stalled, though he believes international pressure could yet revive it.

Rep. Frank's bill, which would require the U.S. Department of the Treasury to regulate online gambling Web sites, currently has 36 co-sponsors.

A competing bill to fund a one-year study of Internet gambling -- sponsored by Nevada Democrat Shelley Berkley -- has 64 co-sponsors, though it has not been scheduled for a hearing and even Rep. Berkley believes it will be 2008 before any action is likely on her proposal.

Mr. Mendel, the attorney, says he would welcome a study of the $13 billion Internet gambling industry -- a study that many have surmised could lead to regulated, taxed virtual casinos based in Nevada.

Antigua and Barbuda could serve as a pilot for the study, he suggests. "If a true test is given, we feel strongly that we could prove Internet gambling in Antigua and Barbuda is a safe and respectable business."

Of course, one of the arguments for lifting the ban will always be the hope that the federal government can slap on additional taxes.

But how would such taxes be enforced, without rigorous snooping on all private Internet commerce -- whether gambling-related or not?

The more basic question is how we arrived at a default setting where everything has to be either taxed and regulated, or else banned outright. What ever happened to freedom?

Why should anyone have to pay Congress a share of the take -- like the victims of some protection racket allowing the local mob boss to "wet his beak" -- for the privilege of merely being let alone? Why can't Congress simply keep its mitts off the Internet and let Americans choose whether and how to risk their own money in games of chance?