In the New York Times on Monday, two prominent financial analysts pointed out the severity of the current Internet gaming legislation in an op-ed article for one of the most respected daily newspapers in the country.
Robert Hahn, the executive director of the American Enterprise Institute-Brookings Joint Center, and Paul Tetlock, an assistant professor of finance at the University of Texas, point out in their Times article that the new legislation will have an across-the-board effect on much more than just the gaming industry. In their article titled 'Short Odds For Ignorance', they point out that the legislation (which is expected to be signed by President Bush very soon) will have serious effects on millions of American poker players and gamblers as well as impact the online gaming corporations to the tune of billions of dollars. While they state that these are serious financial outcomes, they also state that the legislation will have an effect on other beneficial aspects of Internet wagering activity.
One aspect that the two gentlemen look at is called information markets. Information markets are basically wagering on the performance of certain aspects of society, such as elections, variances in the unemployment rate and business performance. Hahn and Tetlock point out there are approximately twenty Internet sites that offer this type of wagering and, by being prohibited from action from American interests, the government and academia are losing a vast research and information tool that could be utilized in all aspects of America and around the world.
These information markets, they state, can make forecasts much more accurately than experts in those same arenas can make. The reason for this is simple; because the people investing in these information "contracts" are putting their own money on the line, they research the differing subjects deeper and make better choices. It thus reasons that, because the people playing these markets aren't bound by political or national biases but only by the bottom line, they reflect the thoughts that truly exist in the marketplace.
Hahn and Tetlock are looking for a carve-out in the Internet legislation that will continue to allow the information markets to continue to cultivate their information and be administered by the Commodities Futures Trading Commission. As the information market field is one that requires study, thought, skill and daring, the same could be well argued for online poker. While the two gentlemen don't believe poker falls in that category, there is a huge argument that could be made to make the same carve-out in the legislation for poker, as it is a game that also has many of the same attributes of the information market wagering industry.
The article is an interesting look in depth to what other than online poker and casino gaming is affected by the legislation. To view the entirety of the op-ed piece, be sure to visit nytimes.com and search for the article's title "Short Odds For Ignorance". While it doesn't directly address the online poker situation, it does show other businesses that will be hurt by the Unlawful Internet Gambling Enforcement Act of 2006.
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