The Mouthpiece

By Martin Owens
Contributing Editor

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    Martin Owens

    Was that a levee we just heard breaking?

    Congress approves "prize linked" bank accounts

    Now, cryin' won't help you, prayin' won't do you no good,
    When the levee breaks, mama, you got to move.
    Led Zeppelin

    Philadelphia, PA (Sports Network) - The biggest single obstacle to the expansion of gambling in the USA, casino-style, card games, or sportsbooks, online or off, is the gut feeling that gambling is fundamentally wrong. It is a belief that has lingered from ancient times into America's colonial past, and on to the present day.

    But I do not mention this with a sneer. The survival of this taboo is no small accomplishment when we consider that acts and practices which were once abominations are now liberties, what were once sacrileges are now civil rights, protected with the full vigor of the law. Somehow, gambling is the last sin and we gamblers are the last sinners. At a time when the very concept of right and wrong is regarded as a bad-tempered anachronism, somehow it remains correct to forbid gambling in the name of a higher morality, binding upon all and sundry.

    It is a matter of tradition, a matter of attitude and prejudice. As Mark Twain observed, these are made of granite and boiler iron, and they endure when mere laws are turned to cobwebs and tissue paper. Don't take my word for it. Try rational argument- just try it. When some self-appointed moral guardian says that gambling impoverishes the unwary and ignorant, try pointing out that careless and foolish monetary policies enabled a worldwide financial meltdown based upon worthless financial instruments, credit debt swap derivative double pumpkin latte some-damn-thing or-others. Which were not even intelligible to the people who wrote them, and resulted in the loss of $39 trillion worldwide when the merry-go-round broke down. Just try and mention that 10,000 casinos put together could not have inflicted half that damage, and that society's vulnerable classes need more protection from the stock market and the realtor than from the gambling hall these days. Oh, they may retreat for the moment, but the look they cast over their shoulder assures you that they are not done fighting, and while they resent you for opposing them, they will never forgive you for being right.

    The Real Players

    Why? Because as usual in public debates of this kind, what we are talking about is not what we are talking about at all. Essentially, there are two camps which object to expanded gambling under the laws of any state (and we must remember that in the USA, gambling law is a matter of state gambling law, unless the Federal Government steps in, which is very unlikely right now). The first group are the aforementioned guardians of public morality. They rely upon the biblical injunction that man shall eat bread in the sweat of his face, and therefore hold it as contrary to the will of God to peddle notions of something for nothing, particularly at a buck a pop like the state lotteries.

    The second group, much more practical, and very much more effective at the Statehouse level, are the people who have been granted some sort of state licensed concession to gamble. And there is some sort of gambling, betting, or wagering authorized in 48 of the Fifty States (and a couple of the territories besides). They are much more worried about losing what they have, than any possible gain from a perspective tomorrow, even if that gain might be their own.

    They, too, are fond of employing the argument that the betting public of their home state needs the protection of government regulation. In particular, regulation by a government which they influence. Our gambling is honest and properly supervised. Those other guys? Who knows? This was a colorable argument as long as the others were mainly offshore jurisdictions, smaller nations with nice loose regulations and nice tight secrecy laws. But it is much harder to say that our gambling is honest, but the state next door-maybe not. Yet the vested interests and their lobbyists recite it with a straight face. Only the kind of regulation that we can provide, they say, can contain the inherent evil of gambling.

    One gang wants to control public morality. The other gang wants to control a licensed monopoly market. But the name of the game is and always will be : control.

    Taking It to the Bank

    But at the same time, control is slipping in another direction. We are used to a banking model whereby individuals were encouraged to deposit money in savings accounts, which would then be used as the seed capital to finance industry and social expansion. But decades of inflation in deficit spending, capped by the aforementioned financial meltdown of 2008, have driven governments into what is called quantitative easing. For our purposes, the important thing about quantitative easing is that it involves banks paying very little interest, or none at all.

    But even at the same time that they pay interest so low that no one is interested, banks still need people to deposit their savings. What to do?

    One answer has been found in the prize linked savings account (PLSA). Here's how it works: for every, let's say, $100 deposited, the deposit tour is awarded a chance in a drawing to win a valuable prize (mostly cash). Therefore, the more deposits, the more points, and the better chances of winning. But wait a minute - haven't we seen this before?

    Yes! It is none other than our old friend the raffle, also known as the lottery, also known as Wicked Gambling. Well, it's not really gambling, say the proponents, because there is no risk involved. If a depositor does not win a prize, he does not lose his deposit, and the regular interest on his account, if any, continues to accrue without interruption one way or the other.

    The scale of acceptance has been worldwide. Latin countries such as Argentina and Mexico, EU members such as Germany and Spain, even hard-core Muslim nations such as Pakistan, Iran, and the United Arab Emirates all allow PLSA's. The religious authorities there have ruled that PLSA's are not forbidden games of chance, inasmuch as even though an element of chance is present there is no possibility of loss. And because the return is variable, these accounts get around the equally strict Islamic taboo on guaranteed interest accounts, considered to be a form of usury.

    And PLSAss are here in the USA as well. Maryland, Michigan, Nebraska, North Carolina, Rhode Island and Washington are all participating, or have passed legislation allowing them. Just as state licensed gambling is touted as source of income, PLSAs are presented as an incentive that will encourage people with no savings accounts to start opening them, and so be gradually coaxed into civic and righteous behavior. And now PLSAs have been authorized on a national level with the American Savings Promotion Act , passed in the U.S. Senate on December 10 by unanimous consent. No congressional gridlock here!

    Is the Pillar Still There?

    Maybe that will work. Maybe it won't. But it is a definite milestone when the old virtue of saving and thrift has to be baited with the attraction of something for nothing. The objection to something for nothing, the notion that this attitude does unrighteous things to the soul and the society is the underpinning of all opposition to gambling, its pillar. If even the banks need what are essentially contests of chance to encourage simple investment, how much longer will gamblers and gambling be portrayed as society's black sheep?

    Mr. Owens is a California attorney specializing in the law of Internet and interactive gaming since 1998. Co-author of INTERNET GAMING LAW with Professor Nelson Rose, (Mary Ann Liebert Publishers, 2nd ed 2009); Associate Editor, Gaming Law Review & Economics; Contributing Editor, TSN. Comments and inquiries welcome at to

    Copyright 2015

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