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Government Delays New Ban On Internet Gambling 143

Posted by Soulskill
from the twenty-bucks-says-they-extend-it-again dept.
The Installer writes with this quote from the Associated Press: "The Treasury Department and the Federal Reserve are giving US financial institutions an additional six months to comply with regulations designed to ban Internet gambling. ... The delayed rules would curb online gambling by prohibiting financial institutions from accepting payments from credit cards, checks or electronic fund transfers to settle online wagers. The financial industry complained that the new rules would be difficult to enforce because they did not offer a clear definition of what constitutes Internet gambling. They had sought a 12-month delay in implementing provisions of the Unlawful Internet Gambling Enforcement Act that Congress had passed in 2006. ... US bettors have been estimated to supply at least half the revenue of the $16 billion Internet gambling industry, which is largely hosted overseas."
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Government Delays New Ban On Internet Gambling

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  • Implementing this _might_ hurt US financial institutions. It will not reduce internet gambling.
    • by DamonHD (794830)

      It already *has* hurt non-US financial institutions and runs entirely counter to all the rules that the US wanted the rest of the world to run by.

      It's a travesty and should be undone entirely, not merely delayed.

      And no, I don't believe that it has had much impact on gambling: maybe driven more of it underground and into the hands of criminals. Wasn't something called "prohibition" tried once (or twice)? How did it work out?

      Rgds

      Damon

      • by MrNaz (730548) * on Saturday November 28, 2009 @12:46PM (#30255146) Homepage

        This situation aside, I don't believe the prohibition failure is a universally applicable example that can be cited every time the government wants to regulate something that's inherently hard to regulate. It's a balance between the cost associated with enforcement and the cost of allowing the activity to occur unregulated.

        If you don't apply the calculus correctly then you could argue that murder is hard to prosecute, therefore we should just allow it. After all, prohibition failed. Ditto for all hard drugs. Should we allow unrestricted use of heroin and cocaine? There may be some callous people who would argue that banning drugs is interfering with Darwinian mechanisms, but the reality is that many youth don't know what's good for them, and need to have access to hard drugs removed to protect themselves from making poor decisions in the period they are still learning to evaluate choices maturely.

        Apply the prohibition lesson sparingly, as it can lead to manifestly unjust and dangerous policy decisions if invoked carelessly.

        • by causality (777677) on Saturday November 28, 2009 @12:57PM (#30255230)

          This situation aside, I don't believe the prohibition failure is a universally applicable example that can be cited every time the government wants to regulate something that's inherently hard to regulate. It's a balance between the cost associated with enforcement and the cost of allowing the activity to occur unregulated.

          Prohibition is a great example because drugs and gambling have two things in common: there's no victim. Someone can gamble away their last cent if that's really how they want to spend their mortal life; this doesn't force you or me to do anything. As I view the protection of civil rights to be the main reason why government has law enforcement powers, and no one is using force or fraud to infringe anyone's civil rights here, I am having a hard time understanding why government is even involved. This is exactly like Prohibition, during which some people wanted to drink alcohol, didn't force anyone else to drink if they didn't want to, and still the government felt a need to create a victimless crime. Just like with alcohol, this seems to be based on some kind of Puritannical outrage and has little to do with logic and reason.

          If you don't apply the calculus correctly then you could argue that murder is hard to prosecute, therefore we should just allow it. After all, prohibition failed. Ditto for all hard drugs. Should we allow unrestricted use of heroin and cocaine? There may be some callous people who would argue that banning drugs is interfering with Darwinian mechanisms, but the reality is that many youth don't know what's good for them, and need to have access to hard drugs removed to protect themselves from making poor decisions in the period they are still learning to evaluate choices maturely.

          If you think drug prohibition has removed the street availability of drugs, it's because you frankly haven't done the slightest research on it. For many youths, alcohol is actually more difficult to obtain than illegal drugs for the simple reason that the store clerk wants to see ID but the drug dealer doesn't. People might go into drug withdrawals because they cannot afford heroin and cocaine, but not because they don't know where to find them. The War on Drugs has been a total failure in this regard, just like alcohol Prohibition was a total failure. A total failure unless, of course, your goal was to expand the police powers of government, in which case it has been quite successful.

          • Re: (Score:3, Insightful)

            by alexhard (778254)

            It's also worth noting that virtually the only reason organized crime exists is because of the drug prohibition..the government is basically subsidizing the various mafias and drug cartels.

          • Re: (Score:3, Insightful)

            by Shakrai (717556)

            I am having a hard time understanding why government is even involved

            Because it doesn't want the competition. Gambling is bad, unless it's sponsored by the state under the guise of funding education, and then it's just fine and dandy. As far as I'm concerned if the Federal Government wants to ban gambling it should start by outlawing interstate lotteries (the Federal Government arguably has the power to do this under the interstate commerce clause) and continue by encouraging the states to abandon their intrastate lotteries.

            Otherwise it's just hypocrisy and more "do as I

        • by Ihmhi (1206036)

          Kids using drugs is a problem, yes. Adults using drugs is a problem, too, but they should have the right to put whatever stupid crap they want into their bodies, be it cocaine, Drano, or a bullet (and on a really bad day, all three).

          • Re: (Score:3, Insightful)

            by roguetrick (1147853)

            Gambling is a sticky issue though. Not only is it proven to be addictive but it also affects poorer individuals much worse than richer. Check out the lotto lines in Baltimore if you want tangible evidence of that. I think its idealism that causes people to believe that individuals are always capable and usually do make informed rational decisions on subjects that have great implications.

            • Re: (Score:3, Insightful)

              by Shakrai (717556)

              Not only is it proven to be addictive

              So what?

              but it also affects poorer individuals much worse than richer

              So what?

              I think its idealism that causes people to believe that individuals are always capable and usually do make informed rational decisions on subjects that have great implications.

              I'm not that idealistic. Large numbers of people are morons. But again, so what? Why should we infringe on the freedom of those who aren't morons to protect those that are? Many people enjoy recreational drugs and/or gambling and still manage to lead productive lives. Why should their pursuit of happiness be impeded because of those who can't responsibly manage to do the same?

              • Re: (Score:2, Insightful)

                by causality (777677)

                Why should their pursuit of happiness be impeded because of those who can't responsibly manage to do the same?

                So that a bunch of well-meaning but foolish people can feel good about having done something, without ever addressing any of the underlying issues and personal weaknesses that make a person vulnerable to gambling addiction or any other addiction. It's an example of "politician's logic" which says "something must be done -- this is something, so it must be done!" It amounts to an attempt to remove

                • by Ihmhi (1206036)

                  One of my favorite quotes about the lottery is that it's a tax on people who are bad at math (specifically statistics/odds).

                  For every person who pawns their TV to buy fifty scratch-offs, there's ten people who buy the one Pick Six ticket a week. For every person who goes broke in Atlantic City, there's people like my good friend who can spend $200 at the Blackjack table, lose it all, and not drop anymore money.

                  The same can be applied to nearly every other "vice" behavior. I truly do believe that a minority

        • by SanityInAnarchy (655584) <ninja@slaphack.com> on Saturday November 28, 2009 @01:40PM (#30255458) Journal

          If you don't apply the calculus correctly then you could argue that murder is hard to prosecute, therefore we should just allow it.

          Murder directly hurts another human being. More technically, it denies them of basic rights, like the right to live.

          Neither alcohol nor gambling does this. A father might beat his kid in a drunken rage, or bankrupt the family (even make them homeless) from gambling debts, but in this case, it is the father who is doing each of these. The alcohol, for one, is an inanimate object.

          Ditto for all hard drugs. Should we allow unrestricted use of heroin and cocaine?

          Yes.

          Why shouldn't we?

          the reality is that many youth don't know what's good for them,

          And that is the real problem -- so educate them on what's good for them.

          And again, drugs are inanimate objects. It's possible to abuse cough medicine, after all, just as it's possible to use cocaine properly -- consider coca tea.

          need to have access to hard drugs removed to protect themselves

          So, that works about as well as prohibition.

          That is: These kids have about as much access as they always did. As causality says, these drugs may be easier to obtain than alcohol. Telling them "don't try it" is about as effective as abstinence-only education.

          Now, I still haven't tried drugs and alcohol, but my parents actually went out of their way to explain the differences between drugs. They made it clear that they don't approve, but they also didn't lie to me about things like marijuana, which probably wouldn't be that harmful, versus cocaine and heroin, which would probably destroy my life.

          to protect themselves from making poor decisions in the period they are still learning to evaluate choices maturely.

          If it's about maturity, why are hard drugs illegal at any age, but alcohol is legal at 21?

          It's also worth mentioning: The war on drugs, like prohibition, has significant collateral damage. Leaving drug convictions aside, there's still the massive network of organized crime that would utterly collapse if we started making and selling drugs legally. It would also cut the balls off of the real, bloody war that's happening in Mexico -- seems we can tolerate drug prohibition because the violence is down there, rather than in our back yard, as it was with alcohol prohibition -- but with Americans growing their own drugs, there wouldn't be so much traffic through Mexico.

          There's also the deal the American government has struck with Peru, which includes an attempt to eradicate the Coca plant from Peru. Coca, as you may know, can be used to make cocaine, if processed and insanely concentrated. By itself, though, the coca leaf makes a mild tea, much milder than coffee -- and it's an important part of their culture, which we are killing off, because someone might make cocaine out of it.

          Consider a world in which coffee was illegal. Sure, if you drink too much coffee, you get jittery, and the withdrawal headaches are painful. If you drink enough coffee, you could probably kill yourself. And coffee is fairly dilute -- suppose you took the syrup used to make fountain drinks, and just drank that straight, or snorted it. Don't you think that'd be dangerous? Clearly, we should regulate coffee to protect kids from themselves.

          Apply the prohibition lesson liberally, until it sinks in. If you can't tell the difference between murder and alcoholism, you clearly haven't learned the lesson of prohibition.

          • Peripheral damages are certainly a viable reason for prohibition. Consumer protection, environmental, and public health initiatives all contain fine examples of that. In an even more general sense, preventative measures in public policy are quite common. To take your automobile example, you can only drive certain types of automobiles due to the increased danger certain designs present to others driving, you, and any occupants you bring along.

            In addition, your belief that knowledge will solve all problems

            • by zach_the_lizard (1317619) on Saturday November 28, 2009 @04:43PM (#30256602)

              Peripheral damages are certainly a viable reason for prohibition.

              I demand that you stop driving; it can kill people. I wonder how many more people are killed by cars than drugs? Cars kill ~40000 in the US. Drugs kill ~17000. Poor diet killed ~365000.
              "Actual Causes of Death in the United States, 2000," Journal of the American Medical Association, March 10, 2004, Vol. 291, No. 10, pp. 1238, 1241.

              Consumer protection, environmental, and public health initiatives all contain fine examples of that.

              You will note that those programs are far from unopposed. The health issue in particular attracts a huge amount of debate.

            • To take your automobile example, you can only drive certain types of automobiles due to the increased danger certain designs present to others driving,

              And that is the key.

              Also, you're wrong -- you can drive whatever you want, and I'm not even sure the age restriction applies. Laws restricting driving apply to what you do on public roads, not what you do on your own property.

              In addition, your belief that knowledge will solve all problems is ludicrous.

              When have I ever claimed this?

              All I am saying is that education has a much greater chance of working than flat-out prohibition. For example: If you spread misinformation and propaganda, like Sex Madness [archive.org], you hurt your cause. So, don't tell kids that Marijuana is addictive, or that it'l

        • by bnenning (58349)

          If you don't apply the calculus correctly then you could argue that murder is hard to prosecute, therefore we should just allow it.

          Murder is much easier to prosecute than drug crimes, mainly because it's almost always obvious when a murder occurs.

    • Don't forget to include "buying stocks on-line." After all, the stock market IS gambling.

      And "mail-order Russian brides."

      And "Investing in Internet companies".

      These all meet any definition of online gambling that would include wagers on the outcome of an event, same as betting on horse races, football games, and powerball draws.

  • by Anonymous Coward on Saturday November 28, 2009 @12:00PM (#30254858)

    Is there any American out there who can explain to me how it's somehow "wrong" when somebody chooses to risk their money betting on poker or blackjack games, but it's perfectly acceptable (and even promoted as a "patriotic duty") to gamble in corporate stocks that often offer greater risk and worse returns?

    • by Anonymous Coward on Saturday November 28, 2009 @12:09PM (#30254920)

      Its nothing to do with right or wrong. Its just because US gambling businesses are losing money to overseas gambling sites.
      The ban was done on "moral" grounds. If its morally wrong to gamble over the internet why do they allow betting on horses etc?

      The WTO has repeatedly told the US to stop this (or at least change it so the same rules apply to everyone) after Antigua
      complained. I haven't heard anything new since Antigua applied to the WTO to remedy this (by getting an exemption to copyrights
      on US goods I believe).

      • by Joce640k (829181)

        It's "wrong" to let people do it from the comfort of their own homes at the click of a button.

        Gambling should be legal but take some sort of effort to do.

        Having said that, sending all that money overseas out of the US economy doesn't seem like it's going to help anybody.

        • It's "wrong" to let people do it from the comfort of their own homes at the click of a button.

          So we should outlaw sports bookies, too? All you have to do is pick up the phone, right?

        • Why? Its not harming you. Worst case scenario I lose all my money. It doesn't affect you.
      • by mikael (484)

        The Las Vegas casino industry formed an alliance with the Christian fundamentalists to campaign against offshore gambling, "It's better to have to gambling permitted under regulated legislation in the country than to have a unlicensed gambling offshore" was the compromise position.

        • I agree with that position. The inevitable question to it, of course, is whats stopping us from licensing the offshore gambling. Then you have the response "Gambling should be a local issue, not interfered with by the federal government." Then you respond "by making it illegal you are making the decision on the federal level" and they respond "alright so how about we license them, but part of the licensing is they have to verify that you are not a resident of an area where gambling is not allowed." To t

      • by XO (250276)

        Not true. The people who were responsible for this laughable attempt at "banning" "illegal gambling" (without defining "illegal gambling", so no one actually has any idea what it's banning), were not in the pocket of Vegas. Vegas wants to be in on it, but it's not clearly legal. Vegas wants it to be defined.

    • by ShakaUVM (157947) on Saturday November 28, 2009 @12:11PM (#30254928) Homepage Journal

      >>Is there any American out there who can explain to me how it's somehow "wrong"

      There's been a long, long history of considering gambling to be a social evil. To a certain extent, I sympathize with it, as I had a friend inherit a house, move to Vegas, and a year later have no house. He runs a fish store now, in Bakersfield. (Bakersfield!)

      That said, I think the government should only be involved in online gambling to prevent fraud and enforce contracts. (You know, the main reason why government should be involved in any business - enforcing the rule of law.)

      • by tepples (727027) <tepples.gmail@com> on Saturday November 28, 2009 @12:27PM (#30255026) Homepage Journal

        I think the government should only be involved in online gambling to prevent fraud and enforce contracts.

        Anti-gambling advocates would claim that telling customers "you can win" is itself fraud.

        • by darjen (879890)

          how many customers go into the casino and actually expect to win something? my guess would be a rather small minority. just because a few can't handle it, should that ruin the entertainment for everyone else?

          • by RoboRay (735839)

            If you don't expect to win, you're an idiot for going into a casino.

            (And yes, I know how high the odds are stacked on the casino's side. Read between the lines.)

            • Re: (Score:3, Insightful)

              by a whoabot (706122)

              Why would that make you an idiot? I don't expect to win anything when I go the cinema for two hours (in fact, I expect to lose: the admission price), but I still might do it because it was an entertaining experience.

            • by nedlohs (1335013) on Saturday November 28, 2009 @04:04PM (#30256364)

              I don't expect to walk out of seeing a movie with more money that I walked in with, so I'm an idiot for going to the movies?

              I don't expect to make money watching my kid play sport on the weekend, so I'm an idiot for doing so?

              I don't expect come out ahead financially when I go to a bar with friends, so I'm an idiot for doing that?

              I don't expect to ever see any of the $50 I paid for a new video game back, so I'm an idiot for buying and play it?

              I pay my ISP each month, so I'm an idiot for browsing the web and using email?

              I had breakfast at a cafe this morning, idiot again?

          • Re: (Score:3, Insightful)

            by roguetrick (1147853)

            Theres plenty of us that don't believe a single fact can change how you view things. Call it complicity with the psychoanalysts, but I just don't find people of one mind and totally rational. "Well, i know chances are I won't win anything. But imagine how great it would be if I did. If I don't go and try, that awesome great thing will never happen, and I would have to give up on that dream. I don't want to do that."

        • Re: (Score:3, Informative)

          by fatray (160258)

          Anti-gambling advocates would claim that telling customers "you can win" is itself fraud.

          This may be true of casino gambling where you play against the casino and the game is designed so that the odds favor the casino. There are forms of gambling where you play against the other players and the casino only books the bets--for a fee. Those are poker, sports betting and horse racing (and possibly others that I'm not remembering). Poker and sports betting are beatable for the skilled player. I'm not sure about horse racing because the tracks (+etc) take a pretty large cut of the action as their fe

          • It also has an assumption of competence in the player. If anything that type of gambling can be more dangerous, even if it isn't the archetypal big guy vs little guy scenario. A guy farther down in the conversation discussed how he is a professional online poker player who makes his money on drunk guys deciding to play. Is that sort of relationship any less exploitive truly?

        • by ShakaUVM (157947)

          >>Anti-gambling advocates would claim that telling customers "you can win" is itself fraud.

          Telling people "You WILL win" is fraud. Telling people they CAN win is not... unless it's a rigged game like 3-card monty.

          I once put a nickel into a slot machine at Chuckchansi, telling him my "strategy for slots" was to hit the jackpot every time. I hit the button, and made 15 bucks off of it. His expression was priceless.

        • by alexo (9335)

          Anti-gambling advocates would claim that telling customers "you can win" is itself fraud.

          Why?
          There are always winners and losers in such games. It is just that the house edge makes sure that, over time, the total sum of player wins is somewhat less that the total sum of player losses.

          So it is a fact is that you _can_ win. Another fact, which is unfortunately rarely mentioned, is that if you are playing against the house, statistically you are more likely to lose.

          I don't know about the brick & mortar e

    • Look at the difference between Internet gambling and having to gamble in person.

      With the Internet, it is so easy to lose money. You hop on, gamble, and there goes your money. At least with a casino, you have to make the effort of going there in person.

      But, personally, I don't think credit cards should be used to facilitate any form of gambling, Internet or otherwise. If you don't have the money, perhaps you shouldn't be gambling.

      Plus, letting online gambling be legal would pose the question of how the gover

      • by bnenning (58349)

        Plus, letting online gambling be legal would pose the question of how the government regulates something that could end up costing you your house.

        How is that going to happen exactly? Online casinos aren't in the business of extending credit; you have to make a deposit before you can gamble, and that deposit is all you can lose. Yes, if you sell your house to fund your account and lose it all then you're screwed, but that's also the case if you sold your house to buy Citigroup stock 5 years ago.

    • Re: (Score:2, Insightful)

      by bocin (886008)
      I'm sure the history of gambling prohibition has root in some B.S. moral/religious grounds. Gambling does seem to lose most, if not all, of its EVIL value when regulated by government.
      • The moral argument comes from the relationship between the gambling house and the gambler. I'm a secular humanist and I see gambling as the exploitation of irrationality, thus I'm certainly not in favor of it. That in addition to the fact that most of the evils of gambling are shouldered by poor individuals, furthering the idea of the little guy getting exploited. These sort of themes would strike a chord with religious and non-religious individuals alike. I guess you could argue that the predisposition

    • It isn't the risking of money that is a vice. It is the combination of risking money in vain, and the desire to make money detached from labor and productive output, that make gambling a vice. Gambling is the intersection of avarice and sloth, similar to politics.

      While there are many vices associated with the stock market, and certainly day trading and futures trading are or or border on being vices, the straightforward purchasing of stock in a company is not. Purchasing stock in a company is an investment

  • by Joce640k (829181) on Saturday November 28, 2009 @12:11PM (#30254924) Homepage

    Which part of this plan isn't going to work out too well? Am I missing something obvious...?

    • by evilviper (135110)

      It's overseas companies, but HALF their income is from people in the US, using US-based computers, and credit cards issued by US financial institutions.

      Sure, there are a few ways you could get around it, and you might even get away with it if you only ever lose money. But should you have any success, there's one of two possible outcomes.

      1) You don't declare it on your income tax returns, the IRS investigates, and you either pay a truckload of money, or go to jail for tax evasion.

      2) You declare your illeg

  • Antigua? how long be for they get to use free ip of us software and movies / music from the us over this?

  • the most you could do was rack up (a debt of) credits for the door games
  • A hundred bucks this ban gets overturned by Congress before six months is up.

    • 200 says that congress will still act like congress and won't turn down a chance to regulate even more.

  • by Joe The Dragon (967727) on Saturday November 28, 2009 @12:47PM (#30255148)

    Why can't we have on line sports betting in the us?

    We can tax it and make money off it vs not getting tax on the people who sent there money to places out side of the us to do the same thing.

  • Does this mean I can't buy lottery tickets online anymore?
  • Of course, this doesn't mean diddly outside of the USA which makes it pure posturing for the rubes back home in BF, Iowa.

    Cheers!

  • by Wardish (699865) on Saturday November 28, 2009 @01:31PM (#30255394) Journal

    Internet gambling is just one facet of the real problem.

    Somewhere along the line we changed from being citizens of the government to dependents of the government. We lost much of our freedom to do as we wish with minimal intrusions by the government. Phrases such as "For the good of all", "It's for your own good", "It will save many lives.", and of course the classic that's applied to far to many situations, "It's for the children.".

    I'm not saying there isn't a place for government meddling, just that it should be kept to a bare minimum with a very high burden of proof to create and just to make sure, it should regularly expire and have to pass the same burden to reenact.

    The real fact is, you are not free unless you have the right to fail. Gambling away your life or house is fail. I believe they used many of the same arguments to enact prohibition as they are using for gambling now. Think about it.

    • That sort of relationship never existed, or if it did, you'd have to certainly look into pre-greek history to find it.

    • Re: (Score:3, Insightful)

      by evilviper (135110)

      The real fact is, you are not free unless you have the right to fail.

      How do chemicals in my food and containers, which cause deformities and may cause even more severe medical issues, possibly make me free?

      How does being able to drive without wearing a seatbelt, risking my own life, increasing the burden on first responders, the medical system, etc., make me more free?

      The US was never the libertarian ideal you are trying to pretend it was. There were taxes and regulations from the very start. All examples

      • by selven (1556643)

        How do chemicals in my food and containers, which cause deformities and may cause even more severe medical issues, possibly make me free?

        How does being able to drive without wearing a seatbelt, risking my own life, increasing the burden on first responders, the medical system, etc., make me more free?

        There's at least one person out there who, for whatever reason, wants those chemicals. Banning them would hurt him. The rest of the population can simply not buy food that's poisonous, so banning the chemicals, as opposed to simply requiring them to be labeled, does more harm than good. As for the seatbelt, the added gain in comfort and convenience is worth it for some people, and once again people who want to wear seatbelts still can. I would have no problem with denying free medical care to people in car

        • by evilviper (135110)

          There's at least one person out there who, for whatever reason, wants those chemicals. Banning them would hurt him. The rest of the population can simply not buy food that's poisonous, so banning the chemicals, as opposed to simply requiring them to be labeled, does more harm than good.

          Yes, indeed. One person does want them, and that person is the one making and selling the item, and simply does not want to have to opt for more expensive alternatives.

          The rest of the population can simply not buy food that'

  • I do not have the time to Google for this, but I was under impression that WTO ruled against US on this very issue. It seems weird that nearly all states have gambling, but now, we are against gambling offshore via the net??????? What total garbage.
  • If the wording in the summary is accurate and "settling a debt" is prohibited what is to stop the sites from charging a "membership fee" or a "security deposit" before you gamble. Then they deduct the loss from the amount you have already deposited. The transaction is made before you actually owe anything so it's not "settling a debt."

    • by nedlohs (1335013)

      And if you win?

      It's going to be hard to get people to pay a membership fee/security deposit if there's no way to pay out winnings.

      • by Skapare (16644)

        Most people never win.

        • by nedlohs (1335013)

          Which is completely irrelevant.

          Most people aren't going to play if they can't cash out if they get amazingly lucky and actually do win. So even though they likely never will want to cash out, not being able to makes it a no go.

  • by PPH (736903)

    They had sought a 12-month delay ...

    I had seven months in the pool.

  • ...that casino opeators and state governments don't want to share. I'm not sure how big of a casino lobby there is in Washington, but I guarantee that every state government that collects taxes from casinos and most casino operators are staunchly opposed to internet gambling. Casino gambling has become so common in the US that you can't really support it any more and still argue that gambling is evil or dangerous. How many states have it? Mine, Ohio, finally voted this month to allow casinos. (It's funny ho
  • I said "No I don't... Wanna bet?"

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