KNPR gets it wrong, wrong, wrong

KNPR is the local public radio news station. Every weekday they have a program called "State of Nevada." I was listening to it yesterday evening as I drove out to the Excalibur. The segment of interest was about online gaming. You can listen to and/or download the show, as well as see guest information and relevant links, here.

The guest was Kathryn LaTour, professor in the department of hotel administration at UNLV. She is the co-author of a recent study comparing gamblers' behavior and feelings about live casino gaming versus online gaming. You can read more about the study through the links collected at the site noted above.

The regular host of "State of Nevada" is Dave Berns. I generally like him. His voice is easy to listen to. He usually does his homework. He is unfailingly polite and respectful, yet won't let public figures duck hard questions that are put to them.

On this show, however, he completely dropped the ball. The very first words of the segment were, "Internet gambling is illegal in this country." This assertion was repeated several times in the broadcast. In fact, at one point Berns specifically said, "And let's be clear, it is illegal under the 1962-63 Federal Wire Tap Law." Another time he questions LaTour about how honest her subjects could have been about their online gaming activities, when answering her questions meant that they were admitting to "breaking federal law."

Wrong, wrong, wrong, wrong, wrong.

First of all, the law in question is the "Interstate Wire Act of 1961" or "Federal Wire Act," not the "1962-63 Federal Wire Tap Law."

Of far more importance, though, is that this law does nothing to criminalize the playing of Internet poker (which was the most common form of online gambling among the users profiled in LaTour's study). The key operative language is this:

Whoever being engaged in the business of betting or wagering knowingly uses a
wire communication facility for the transmission in interstate or foreign
commerce of bets or wagers or information assisting in the placing of bets or
wagers on any sporting event or contest, or for the transmission of a wire
communication which entitles the recipient to receive money or credit as a
result of bets or wagers, or for information assisting in the placing of bets or
wagers, shall be fined under this title or imprisoned not more than two years,
or both.

Note, first, that the crime requires "being engaged in the business of betting or wagering." That clearly means that the statute is directed at those who are running the operation, not the users of the service.

Secondly, the crime is limited to being in the business of betting on a "sporting event or contest." (By standard rules of interpretation of statutes, "contest" there cannot be construed as a broad, stand-alone word, but must be limited or modified by the adjective "sporting" in the same way that the word "event" is.) No court could possibly find that poker falls under that definition.

This plain understanding of the law has been confirmed by the only two federal courts to consider the question, one trial court and one appellate court, in the same case. You can read the appellate decision here. The pertinent sentence is this: "Because the Wire Act does not prohibit non-sports internet gambling, any debts incurred in connection with such gambling are not illegal."

Let's also be clear that the 2006 UIGEA did not change that. Explicit in its terms is a declaration that it it not criminalizing any activity that was not already illegal under existing state or federal law. UIGEA is all about funding and money transfers, not about gambling, and it is directly solely at gambling sites, not banks or other financial institutions, and certainly not at individual gamblers.

For lots more on all of this stuff, see the archives of columns written by I. Nelson Rose, perhaps the foremost authority on gambling law, here and here.

Now let's turn to Ms. LaTour. To be blunt about it, it's astonishing that she would undertake to conduct and publish a study about online gambling when she has no idea what she's talking about.

First, she readily concurs with Berns about all Internet gambling being illegal. She says this unequivocally several times, and says, "Right," in agreement with Berns's comment, quoted above, about the "Federal Wire Tap Law." (She obviously doesn't know enough about the statutes to correct his errors.)

Second, she says that her research was conducted when the World Series of Poker was still allowing players to "earn points" toward entering WSOP tournaments through online play. A few minutes later she repeats this idea, this time saying that the WSOP let players "accrue points" towards tournament entry via playing online.

In truth, of course, there has never been any "points" system for gaining entry into WSOP tournaments. Online players, though sites unaffiliated with the WSOP, have been able to win the money to enter WSOP events. Previously, the sites would pay the entry fees directly to the WSOP. After the passage of the UIGEA, the WSOP got nervous about even this amount of involvement with the poker sites, so those sites switched to simply paying the winners the cash, and leaving it to them to register for the WSOP event and pay the entry fee themselves. (Of course, some just kept the money.)

To me, being so egregiously and repeatedly wrong about two fundamental points of fact so closely related to the subject she was studying strips Ms. LaTour of every shred of credibility. It's frankly an embarrassment to the state to have a professor in our flagship institution of higher learning, in the department for which UNLV is most well-known, not have bothered to learn the most basic facts about online gambling in general, and online poker in particular, before setting out to publish research on that subject. It may not quite constitute academic dishonesty, but it absolutely constitutes an appalling degree of academic laziness and/or ineptitude.

I have emailed both Mr. Berns and Ms. LaTour, pointing them to this post, and inviting their comments in reaction. If I get a response of something either of them might wish to say about my critiques, I'll post an addendum here.


Finally, let me address something a caller to the show said. (I didn't catch his name.) He told his story of having gotten caught up in playing video poker online. He dropped about $1500 on the game, then got very lucky and hit a royal flush, paying him about $4500, cashed out, and never went back to it. But he says that when he was losing he didn't feel like it was real money involved, because he was playing on his credit card. That experience, he said, makes him opposed to online gambling, because other people will similarly lose a lot without realizing that it's "real money."

It is so frustrating and annoying how many people just can't make the basic distinction between "I think you are wrong and/or foolish to engage in that conduct" and "You shouldn't be allowed to engage in that conduct." The list of activities to which you can attach that observation is practically unlimited: Gambling (live or online), pornography, prostitution, owning a gun, driving a gas-guzzling SUV, riding an all-terrain vehicle, riding a Jet Ski, riding a motorcycle without a helmet, skydiving, drinking alcohol, smoking tobacco, smoking marijuana, burning an American flag, eating foods make with trans fats, buying unpasteurized milk from the farmer next door, wearing overly saggy pants, cursing, spanking a child, breastfeeding in public, driving without a seatbelt, having sex with somebody you are not married to and/or a member of the same gender, etc. If there is any way to conclude that an activity is unwise or immoral for you to engage in, there will be a contingent of people trying to use legislative force to prevent you from choosing to do it.

This caller was such a person. In retrospect, he believes that he was foolish and perhaps in financial danger because of the choices he was making, so based on that experience, he wants to impose his will on all 300 million of his fellow Americans. I suppose he figures that if he has little or no self-control or perspective on the matter of online gambling, well then obviously nobody else could, either. He thinks he knows what you should and should not do better than you can decide it for yourself.

This arrogance, this impulse to control everybody else in all sorts of ways, is completely anathema to me. It is antithetical to liberty, which I cherish above all other values, and which was the cornerstone of this nation's founding. I never cease to be astonished at how little most modern Americans care about it.