- The Washington Times - Wednesday, April 27, 2011


It was more than a bit scary to learn last week that FBI agents working with U.S. prosecutors for the Southern District of New York raided the nation’s three largest online poker websites and unsealed indictments against 11 of their executives. Whatever one thinks of poker playing or gambling in general, it’s difficult to think of a justification for the cyberraids.

A look at the facts shows the raids were based on criminal charges that reasonable people might question, hurt law-abiding individuals and involve a serious misallocation of public-sector resources.

To begin with, the criminal charges levied against poker website proprietors - money laundering - seem questionable. The companies and executives did exactly the core business they said they did (operating online poker rooms), and they aren’t accused of cheating their customers. The charges against the website proprietors, if true, meet the legal definition of money laundering, but the underlying acts they engaged in - operating poker websites - aren’t bad for society or something that government should discourage.

Although the U.S. prosecutors are trying to push for serious criminal penalties, common sense suggests the appropriate sanctions for the types of violations involved here are civil fines and perhaps probation, not threatened jail time. Insofar as the website owners allegedly violated laws criminalizing online gambling, the laws are bad ones Congress should repeal.

The raids, furthermore, did their greatest damage to individuals who broke no laws. Even if a website somehow violates the law, merely playing the games it offers isn’t illegal under any section of the United States Code. As a result of the raids, however, people who deposited or earned money on the websites were for several days denied access to their accounts. Given that tens of thousands of Americans rely on poker to help pay living expenses, the attack seems particularly unjust.

Even if the serious questions of legality and fairness could be resolved, raids on online poker rooms wasted resources. Gambling of some sort is legal almost everywhere in the United States, and the 10 largest states all allow casinos. If there were a social consensus that gambling is wrong and ought to be limited - quite arguably, such a consensus existed in the United States as recently as the early 1980s - then efforts to stamp it out might be easier to justify. But there’s no such consensus. In fact, gambling is widely accepted - major TV networks even televise poker tournaments.

On the other hand, dozens of outright scams flourish on the Internet, and major, widely agreed upon priorities such as tracking terrorists and catching Wall Street fraudsters could always use more resources.

The FBI and U.S. prosecutors made a mistake in conducting the raids. They have filed charges as a result of a bad law, have hurt productive, private citizens, and ought to be doing other things with their time. When the cases go to court, the best outcome for the country would be a dismissal with prejudice that forbids the charges from ever being filed again against the same individuals. Merely playing online poker is not a criminal act, and running a website that facilitates it shouldn’t be one, either.

Eli Lehrer is vice president of the Heartland Institute and director of its Washington office.

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