Louisiana Governor Opposed to Online Poker as Predatory State Video Poker Thrives

February 17, 2014
Louisiana Governor Opposed to Online Poker as Predatory State Video Poker Thrives

Louisiana Governor Bobby Jindal has become the latest politician to publish an op-ed campaigning against online gaming. The column was published at Businessreport.com.

After giving a political background of the situation where he defines online gaming as predatory to the poor, he mentions that he promised Louisiana voters that he would not expand gambling in the state.

He also mentions his concerns about money laundering and underage gambling, as well as claiming that a vast majority of Americans are opposed to online gaming. He does not provide any evidence to support these claims. He may be pointing to an FBI letter from five years ago that Chris Grove and Online Poker Report already demonstrated was making the exact opposite point. That is a document the opposition enjoys citing as a source even though it does not support their argument.

He starts his by crusade stating:

The American people, and the people of Louisiana have been left out of this important debate.

The American people have not been left out of the debate. There has not been a change in federal law pertaining to online gaming since 2006. That was when former Senate Majority Leader Bill Frist secretly attached the Unlawful Internet Gambling Enforcement Act to the unrelated Safe Port Act just before a recess.

If Gov. Jindal would like to discuss the American people not having a say, then we need to go back and debate the merits of Frist’s actions and have a real discussion about it. Proponents have been trying to do that for eight years.

Another point I found interesting was:

[T]here is a big difference between having to go to a casino and having a casino come to you.

That is a fair point. Gaming companies do not always support predatory convenience gambling, but Louisiana does.

Louisiana Already Sponsors Predatory Gambling

Louisiana offers a lottery with paybacks that typically return about 50 percent to players. These tickets can be bought at retailers throughout the state. Louisiana goes far beyond that form of bad convenience gambling.

Video poker is widely available in 31 of the state’s 64 parishes. Most of the state’s residents live in or near a parish where video poker is legal in bars, gas stations, truck stops and restaurants.

These machines offer some of the worst games imaginable in any gambling setting. Even worse, the bad gambling is mandated by Louisiana law.

Louisiana Title 42, Part 11 §2413 A-1(b) states:

A maximum expected payback value for one credit that shall not exceed 94 percent of the value of a credit based on optimum operating play strategy

Louisiana does not allow its gamblers to get dealt a video poker hand dealt at a bar, truck stop or restaurant, that returns more than 94 percent, as mandated by state law. The best video poker game in a bar or truck stop in Louisiana has 12 times the house advantage of full pay Jacks or Better, a game available at all New Jersey regulated online casinos. The tax rate on the machine’s hold is between 26.5% and 32.5%, depending on the type of venue.  This means Louisiana and its parishes have an interest in these games paying out as little as possible.

This is not a fair deal for Louisiana players. If the governor is so concerned about predatory gambling, why are these machines allowed to fleece players? What is he doing about that?

He has vetoed at least three laws that would have changed regulatory requirements, but a Google search does not show any indication he has ever tried to make the games more fair or remove them outright.  Governor Jindal needs to clean up his own backyard before preaching to the rest of us.

It is hard to imagine how video poker that returns 99.5 percent over the Internet is worse than games that return 94 percent or less at a truck stop.

After making other assumptions about what Americans want and think, he makes this statement:

It is impossible to implement a responsible gambling protocol in an Internet gambling environment.

There is a mountain of evidence that disputes this claim and he does not back it up.

He cites an FBI opinion that “Internet gambling is often used for fraud and money laundering” and other comments that appear to have come directly from Sheldon Adelson supporters that have already been refuted.

He follows this with a discussion about the Wire Act opinion reversal. It seems he does not know what the Wire Act covers. I published an editorial showing the text of the Interstate Wire Act. It seems Governor Jindal is missing the key word in that law – “Interstate”.

Nevada already had legalized online gambling when the feds published its revised opinion in December 2011. It was sports betting, the exact form of wagering the Wire Act seeks to forbid.  Nevada’s mobile and online sports betting was legal before the DOJ reversal because it was intrastate, something never covered by the Wire Act.

Maybe Gov. Jindal is against interstate liquidity agreements. That is about all that would be accomplished by a reversal in the Wire Act opinion.

I am unable to understand what he claims in his closing:

But, because of the ease in setting up gambling accounts on a mobile device and laptop, if enough states make the poor decision to allow Internet gambling, it will be nearly impossible to stop in states that do not allow it.

I wish Gov. Jindal had expanded on this thought. It seems to me that he thinks online gaming will be forced on his state if legalized in others. There is no evidence that the feds would ever force a state into gambling, especially since Louisiana has laws in place that make online gambling by its residents a crime.

Gov. Jindal’s actions on other policies, including Obamacare and school vouchers make it clear that he support states’ rights. If he does not want to expand gambling in his state then he has every right to that opinion and to take that action. He clearly does not appreciate when the federal government tries to stick its nose into his state’s business. It seems hypocritical to show any concern for what other states are doing when it does not affect his state at all.

Gov. Jindal should have left his opposition as a personal opinion and a campaign promise. His position loses all credibility when looking at the big picture.

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