Place Your Bets, America


Place your bets, America. The National Gambling Impact Study Commission has released its final report. After two years of open deliberation, the question is not so much what it will propose or whether or not Congress and the states will go along with it all. Those who happen to enjoy the occasional wager can only hope not.

Congress established the commission in 1996 to tally up the "social costs"of gambling and examine a range of regulatory options. The commission wasalso to review the costs of such regulation, but on this subject it has sofar said rather little. Instead, we can expect much handwringing overcompulsive gambling, together with a laundry list of fresh regulations tokeep us all on our toes.

Two of the most sweeping recommendations are also the most disturbing -- aban on political campaign contributions from gambling interests and a ban onall gambling over the Internet. As for the real disease plaguing thegambling industry -- government corruption -- the first would at best treatthe symptoms, and the second is very much at the source of the problem.Take the Internet proposal first. In their preliminary recommendations, thecommissioners cite the dangers of "bringing gambling into the home of everyfamily with a computer." Of course, whatever the perils of Internetwagering, the nature of the medium suggests that a ban would likely befutile. Not to mention completely over the top. Concerned parents need dolittle more than keep their credit cards secure and out of the hands oftheir children; if that seems too hard, then the Internet looms as the leastof their problems.

All in all, it is hardly obvious how Internet gambling presents a greaterthreat to society than does any other sort of gambling venture. And pickingon Internet gambling in particular will likely stir suspicions. Proponentsof Internet gaming will surely question the impartiality of the commission,a majority of whose nine members were either bound up with theirbricks-and-mortar casino competitors -- traditional and tribal casinos -- orrepresented the unionized employees of such competitors or else weredyed-in-the-wool opponents of any kind of gambling.

Justified or not, this is precisely the sort of grievance that, little bylittle, is bringing the gambling industry into disrepute -- and governmentofficials along with it. Did former Louisiana governor Edwin Edwards takemoney and gifts in exchange for casino licenses? Did Secretary of theInterior Bruce Babbitt deny a casino license to the Wisconsin Chippewatribes because of pressure from a competing casino interest -- one which, itjust so happens, had generously donated a six-figure sum to the DemocraticNational Committee? The courts will decide, but in any case it isquestionable that government licensure is doing anything to shore up theintegrity of the industry. Quite the opposite. The whole process must atleast be perceived as a grubby exercise in political back scratching andsuppressing competition.

Indeed, the commissioners' proposed ban on political contributions is tacitadmission, in case anyone still doubted it, that the licensure process isparticularly vulnerable to this kind of corruption. Can't brush off thosepesky competitors? Just speak to your friendly congressperson. And leaveyour donation at the door. Who knows, you might even hit the jackpot and wina voice on an influential congressional panel. So it goes when governmentpiles on the regulations and then holds open the door to those seekingdifferential gains through political means. But a ban on politicalcontributions, leaving aside its highly suspect constitutionality, simplymisses the point.

Which is, quite simply, that government licensure is as unnecessary as it isundesirable. While a high standard of gaming integrity is in everyone'sinterest, it is best accomplished voluntarily, by way of privateaccreditation through independent third parties. This is hardly a radicalidea. Along with other vendors of entertainment services, authors,playwrights, moviemakers and restaurateurs routinely submit their productsto independent review. So do manufacturers of electrical and other products,for whom quality assurance can be obtained from several private sources,including the familiar, not-for-profit Underwriters Laboratory. And so too,for that matter, do many vendors of Internet gaming.

That widespread legalization has dispelled mob influence is beyond dispute.Whether strict government oversight played an important role is debatable.Today casinos are typically owned and managed by publicly traded companies,answerable to the market discipline imposed by ordinary shareholders indenim rather than the old-fashioned intimidation of men in dark suits. Thebest policy for lawmakers is an abiding commitment to stay out of thegambling business, and let the chips fall where they may.