Gambling for Health Care

I was reading down a list of health care reform articles on Google yesterday and came across one that had me shaking my head at the way our government works. The title read:

Senator Proposes Online Gambling Regulation to Offset Health Care Costs. Could Frank bill become Baucus bill amendment?

The source was Pokerati.

The idea of using online gaming tax revenues to help fund elements of health care reform became part of the Congressional conversation this weekend. On Saturday, Sen. Ron Wyden (D-OR) introduced a possible amendment to the Baucus bill (America’s Healthy Future Act of 2009) that would rely on the passage of Rep. Barney Frank’s HR 2267 to set up a regulatory structure that would provide health care revenue.

According to the Safe and Secure Internet Gambling Initiative, the tens of billions of dollars collected by the U.S. government from online gaming could offset health care costs going forward

Since this wasn’t the article that I was looking for at the time, I barely skimmed the opening paragraphs and moved on. But a few minutes later a little light went on in the back of my head, so I did a quick search and found this from back in March when our financial house was crumbling.

Reported by Reuters:

A senior Democratic lawmaker said on Thursday he would push to pass legislation to repeal a three-year-old U.S. ban on Internet gambling that has hurt trade ties with European Union.

I’m going to be pushing it,” House of Representatives Financial Services Committee Chairman Barney Frank told reporters at a press conference to lay out his agenda for reforming U.S. financial regulation.

Work on drafting the legislation should be completed this month, a House aide said.

The Unlawful Internet Gambling Enforcement Act became law in 2006, during the Bush years, which admittedly makes it suspect. But back in March 2009 we were a country in crises and dealing with numerous pressing issues – not the least of which was reforming our financial sector. And here was Congressman Frank presenting the legalization of on-line gambling as part of that reform effort. What does on-line gambling have to do with our financial crisis? And why were they pressing to complete a draft within the month, which is pretty fast work?

Supporters of the ban, which was enacted when Republicans still controlled Congress and the White House, argued that offshore Internet gambling websites take billions of dollars out of the U.S. economydamage families and serve as vehicles for money laundering.

Advocates of lifting the ban say it is impingement of personal liberty and estimate the United States could raise nearly $52 billion in revenue over the next decade by taxing and regulating Internet gambling instead.

Ding, ding, ding. Taxable revenue. $52 billion worth. So okay. Revenues are down, so I imagine being good government employees they were exploring every revenue stream possible. Still it struck me as odd. It was a priority then, but now, six months later, it is suddenly tied to health care?

Now I was intrigued.

The Hill gave a short blurb on Monday:

Congress should legalize and tax internet gambling to help pay for healthcare reform, says Sen. Ron Wyden (D-Ore.)

The Oregon Democrat will introduce an amendment in the Senate Finance Committee that would use revenue from taxes on internet gambling to increase subsidies for low-income Americans to purchase health insurance.

The proposal depends on passing into law the Internet Gambling Regulation, Consumer Protection and Enforcement Act, which would lift a prohibition on internet gambling while implementing various safeguards to prevent compulsive gambling or underage gambling….

The bare minimum of information there, so I pressed on with my search and found it was a hot story for The Medical News. And strangely, they had considerably more to say than The Hill, including this paragraph that was quoted in the Pokerati but without source:

An increased focus on the benefits of Internet gambling regulation are expected as the Senate Finance Committee considers a proposal introduced on Saturday to use Internet gambling revenue to offset the costs of health care reform. The amendment offered by Senator Ron Wyden (D-OR) would dedicate Internet gambling tax revenue generated through implementation of the currently pending Internet Regulation, Consumer Protection and Enforcement Act (H.R. 2267) to increase low-income subsidies provided through the America’s Healthy Future Act of 2009. A PricewaterhouseCoopers analysis shows that collecting taxes on regulated Internet gambling would allow the U.S. tocapture up to $62.7 billion over the next decade.

Do you get the idea that some very polished marketers are at work here spinning a win-win-win strategy? First there is the benefits of internet gambling regulation and protection (what ever those are). The revenue offset to increased low-income subsidies. And just think, if they didn’t regulate that 62.7 billion would be lost. Including the 10.7 billion in inflation since March.

Amazingly, The Medical News even goes on to quote a gambling lobby group:

“We applaud Senator Wyden’s proposal to collect and put to good use tens of billions in Internet gambling revenue that would otherwise be lost in the underground marketplace,” said Michael Waxman, spokesperson for the Safe and Secure Internet Gambling Initiative. “The Senate Finance Committee should approve the resolution, finally putting to an end a failed prohibition on Internet gambling that leaves Americans unprotected and unlicensed offshore operators as the only beneficiary in a thriving marketplace.”

Funny how everything just happens to lines up so beautifully to provide a huge chunk of funding for health care reform. So now we can all jump aboard what ever health care reform bandwagon comes along with no worries. Never mind having an honest discussion of the cost and benefits of the particular reform for our society. Never mind weighing the priorities that we face as a nation and deciding where that $52 billion should go. Never mind evaluating whether it makes sense to throw open the doors to on-line gambling. Particularly at a time when so many Americans are becoming more and more financially desperate.

No, it is our patriotic duty, after all —

Without this legislation, this revenue will remain uncollected while millions of Americans gamble online without consumer protections.

Yes, gambling money to save lives – that is the American way.


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