Senator Jon Kyl's Bad Bet


On the heels of the huge GOP victory in the Massachusetts Senate race, Senate Minority Whip Jon Kyl (R-Ariz.) decided to stand up to the Obama administration with one of the strongest weapons at his disposal — he halted Senate votes on Treasury Department nominees.


As there are a number of areas where the conservative movement takes issues with administration objectives, this is a target-rich environment. A strong stand here could show America what the Republican Party stands for and what the party will fight for. So, is Kyl standing up for improvements in the health care bill, reduced federal spending, or limits on federal power? No, he is not. Sadly, Sen. Kyl is wasting this powerful, one-shot weapon to register his dissatisfaction with the administration’s granting of a delay in implementing Internet poker and gaming-related financial regulations — a delay that was requested by his fellow Republicans.

The law for which Kyl pushed with so much vigor for so many years is fatally flawed. Despite a decade of trying, beginning with his attempt to add a national online poker and gaming prohibition to the Crime Prevention Act of 1995, Kyl found himself unable to pass an online gaming prohibition through Congress. In 2006, he settled for a law prohibiting money from going from U.S. financial transactions to sites offering “unlawful Internet gambling.” To move this through the Senate, Kyl had this bill tacked on to the must-pass SAFE Port Act in the middle of the night just as the 2006 Congressional term was coming to a close. Thus, the Senate never even voted on this as a free-standing bill.

The law that resulted — the Unlawful Internet Gambling Enforcement Act (UIGEA) — turned out to be as half-baked as its “passage” by the Senate. The law orders financial institutions to locate and block some financial transactions. However, neither the Act nor its regulations define “unlawful Internet gambling.” As a result, banks and credit card companies, including credit card giant MasterCard, have said they will block U.S.-based horse race wagering transactions, this despite the fact that such wagering should be considered clearly lawful and authorized under the Interstate Horse Racing Act. Other online transactions that have never been found to be unlawful are threatened as well, and affected parties have no recourse or appeal.

The bottom line is that UIGEA is completely unworkable and unenforceable. Many traditionally conservative organizations agree that the act needs to be fixed. These groups include the U.S. Chamber of Commerce, many financial institutions and credit unions, Americans for Tax Reform, and the Competitive Enterprise Institute.

As a result of the many problems with UIGEA, twenty-one Republican lawmakers wrote to Treasury Secretary Timothy Geithner to ask him to delay implementation of the regulations that enact key provisions of the law for six months. Included in this group are Senator Mitch McConnell, the entire Kentucky Congressional delegation, Rep. Peter King, and Rep. Ron Paul. Only two wrote in support of UIGEA — Sen. Kyl and the hapless Rep. Spencer Bachus.

Aside from problems with UIGEA itself, fewer and fewer Americans are looking to Washington for protection from themselves. We saw this in the Brown victory, we see it in the Tea Party movement, and we see it in President Obama’s tanking approval ratings (some Americans think they support Obama’s goals in abstract, but many quickly oppose them upon learning of the cost and the loss of liberty). The conservative movement is moving back to its roots — liberty, free markets, and less regulation. While we conservatives definitely still believe in traditional values, we believe the best way protect our values is to keep them away from Washington bureaucrats.

Additionally, not so many Americans even see poker as a values issue these days. Every state but Utah and Hawaii has legalized some gaming. Poker is a very popular game on television as well as at kitchen tables and computer screens in homes of many everyday Americans. Poker players have even organized themselves. The Poker Players Alliance, chaired by former GOP Senator Alfonse D’Amato, boasts a membership of over one million. This group is active in mobilizing its membership and has a strong presence on Capitol Hill.

As a result of the mainstreaming of poker, Americans now realize that the talking points of those who wish to stop others from playing poker are quite exaggerated. The dwindling ranks of poker prohibitionists (who represent the final remnants of the Prohibitionists of the Progressive Era) will say whatever they think needs to be said to persuade others to vote for poker bans. No one knows if they are lying on purpose or are simply clouded by their preconceptions, but fortunately there are real studies and real experiences from which to draw data.

As I mentioned in my last column, the UK, a nation with ample licensed online and “bricks and mortar” gaming, has a problem gaming rate of just 0.6%. This is unchanged from the pre-Internet gaming days of 1999. That is hardly the dire situation anti-gaming folks would have us believe. Likewise, online poker is available right now in all fifty states, and there has been no massive explosion of people with excessive gaming habits. Also, as online poker is already widespread throughout America, poker rights supporters are not seeking an expansion of online poker. Rather, they simply seek to bring the industry onshore, where it will create American jobs while placing the industry under the auspices of American law.

The old GOP — the ones voters tossed out of office in 2006 and 2008 — may have supported things like this Act, though only after party operatives checked the political calculus to ensure it would appease a faction of the party and not alienate too many others. The new conservatism, on the other hand, believes in bedrock principles like limited government. It’s time for Kyl to take a step back, look at what has transpired since 2008, and embrace our new, revived conservative movement. If the Republican Party can do this, the winning hand we drew in Massachusetts may hold up on Election Day this November.


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