The myth of the child poker player

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The House Judiciary Subcommittee on Terrorism, Homeland Security and Investigations is scheduled hold hearings today on a federal bill aimed at stopping states from legalized online gambling.

The Restoration of America’s Wire Act comes in response to a 2011 Justice Department memo stating that, apart from sports betting, there is nothing in the federal Wire Act that prevents a state from permitting intrastate online gambling. Since that memo, Nevada, New Jersey and Delaware have set-up regulatory structures to accommodate online gambling (poker only, in Nevada). Players and advocates are watching California closely, although legislation seems stuck amid political fights between the big casino interests, smaller card rooms, tribal casinos and prohibitionists.

Prohibitionists worry that if California’s sizable population gains access to online gambling, online wagering will spread to other states and, consequently would be difficult to reverse. Hence the urgency of their efforts to win federal preemption before that can happen. At the subcommittee hearing, the R Street Institute’s executive director, Andrew Moylan, will be speaking on behalf retaining state sovereignty over gambling regulation.

Andrew’s addition to the speaker list is welcome, considering that the committee’s original line-up consisted completely of online gambling critics and opponents, many relying on inaccurate data and overly emotional appeals.

A favorite tactic has been to present online gambling as a danger to children. This is a go-to message for the Coalition to Stop Internet Gambling, the organization funded heavily by brick-and-mortar casino magnate Sheldon Adelson. It can be seen in these comments from former U.S. Sen. Blanche Lincoln last November on Mike Huckabee’s Fox News show. Adelson’s less articulate, yet more risible, rant at last year’s Global Gaming Expo can be viewed here (hat tip to World Series of Poker’s Nolan Dalla). They are encapsulated most luridly in a coalition video that shows a pre-teen hacking his father’s iPhone to gamble online.

Among the reasons the commercial fails is its focus on the boy’s poor playing decisions, such as doubling down at blackjack too often and going all-in with poor poker hands. It calls to mind dice-player Sky Masterson’s question to anti-gambling crusader Sarah Brown in Guys and Dolls: “Is it wrong to gamble, or only to lose?”

But practically speaking, it’s very hard for a child to play on a gambling site. To begin with, he needs access to funds to play real money games. This is tautological, but it’s surprising how fast it gets overlooked. Even if junior steals dad’s credit card, a feat in and of itself, he has to be able to negotiate an electronic application form and successfully make a deposit. While it’s true that a seven-year-old can intuit enough to play Angry Birds proficiently, filling out an online financial form requires a level of real-world knowledge and experience that most grade-schoolers don’t have. But even if the occasional precocious kid gets through this, he could be tripped up immediately if he deposits too much. Heck, my credit card company calls me when a series of legitimate transactions for clothing and electronics are processed too close together. Even if mom or dad isn’t alerted at the time of the transaction, when they get the first bill, the chips, so to speak, will hit the fan.

The issue of parental responsibility can’t help but come up, mainly because it’s so carefully avoided in these heated calls to “protect the children.” Like porn sites and online music stores, gambling sites can be easily blocked through at-home filtering. And just like with other harmful issues related to online use—bullying, sexting, inappropriate content—parents can talk to their kids about Internet gambling.

Yes, these games are set up to be alluring and addictive. But they can be resisted with emotional control and a sound knowledge of facts. Frankly, I think there’s a great opportunity to use games that employ cards and dice to introduce children to basic concepts such as probability, expected return, risk management and the gambler’s fallacy, especially because what is often mathematically correct is also counterintuitive. For instance, in Monopoly, most players covet the high-rent properties of Boardwalk and Park Place because they yield high payoffs. But in the long run, the mid-range properties in the orange color group (St. James Place and New York and Tennessee Avenues) are the more profitable. The reason has everything to with probability.

Kids naturally get excited about games of chance. When chance is combined with decision-making strategy that can be mathematically calculated, as it is in gambling games such as poker and blackjack, and with sound adult guidance, it offers adolescents a gateway not to vice, but to the true elegance and science of mathematic concepts, ranging from statistical analysis to equilibrium theory and game theory – the stuff Nobel Prizes are made of. The math argument was strong enough that at least one high school—George Mason in Fall Church, Va.—was allowed to start a poker club.

Opponents of online gambling play up the danger angle because it gets attention. Yet when it comes to consumer protection, in contrast to the propaganda, online casinos may do a far better job at preventing underage players, as spelled out here by Marco Valerio in the current issue of Global Gaming Business. It’s an emotional, anecdotal message that should be given little weight. Certainly it does not justify creating yet another federal prohibition.

Contrary to what many believe, there is no federal law against gambling. The Wire Act simply prohibits using telephone and telegraph facilities to place wagers across state lines. In spite of the RAWA bill’s name, there is nothing about the Wire Act to “restore.” States have been regulating gambling since the nation’s founding. There’s no reason to change that.

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