Newsweek’s Cover Story on Internet Gambling Plays Fast and Loose with Facts

By Michelle Minton Competitive Enterprise Institute Blog. Excerpt:

"Seitz’s decision did not open a “Pandora’s box”—the box had been open for two decades. There is and never has been a federal prohibition on online gambling, which took off as soon as the Internet and personal computing became a staple in American life. In 1999 Scott Olson writing for the Journal of Technology and Law Policy noted that by 1997 consumers spent an estimated $1 billion worldwide on net gambling, with around 60 percent coming from the U.S. (even Kenny Rogers had an online casino in 1998). And during the years when the DOJ was arguably strictest against online gambling, Americans continued to spend billions—$30 billion between 2003 and 2010—gambling on foreign-operated sites. The OLC’s opinion simply dispelled some of the ambiguity in federal law and allowed state authorities to begin regulating the activity within their borders.

Experts “warn that online gambling is dangerously addictive for some, especially children.” 

Goodman never names these experts. Later in the article she quotes “experts” (it’s unclear if they’re the same experts) who claim that the demographic most at risk for problem gambling are people between the ages of 18 and 25. While 18-25 isn’t exactly a tot, I’ll give her the point: Pathological gambling, like other addictive behaviors can ruin lives. The question Ms. Goodman fails to ask is: What impact will the DOJ’s 2011 memo have for these at-risk gamblers?

It seems intuitive that as gambling becomes more available the rate of problem gambling will increase. But research has shown this is not the case. While greater opportunity for gambling does correlate with a temporary increase in disordered behavior, it is just that: temporary. Worldwide rates of problem gambling have been declining since the late 1990s. And according to Harvard addiction expert Howard J. Shaffer, the U.S. rate of pathological gambling remained relatively stable over several decades, and has actually decreased since the 1970s, despite a significant increase in gambling availability.

And while there always will be a small portion of the population who show signs of pathological behavior, it is not a reason to ban an activity for everyone, especially in light of the fact that online casinos are better equipped to address such problems than their brick-and-mortar counterparts.

Many studies, including from Harvard Medical School’s Division on Addiction Studies, have found that online gambling is no more addictive than on-site gaming (see also page 403). In fact, some found that addiction rates were lower for online gambling than some off-line games. One reason could be that online games have substantially more avenues through which they can identify and address compulsive gambling behavior."