The Minnesota Alcohol and Gambling Enforcement Division announced plans to attempt to ban online gambling in Minnesota today.  They have sent a letter to 15 different ISP’s requesting that access to 200 online gaming sites be disallowed.  The state agency cites US Code, Title 18, Section 1084, (d) in its claim that online gambling is illegal.

This brings up a host of questions:

• Is online gambling illegal?
• Is online poker a part of this attempted online gambling ban?
• Will the ISP’s comply with the request?
• Is Minnesota’s action to ban online gambling violative of free speech and the first amendment?
• What is the implication of poker being ruled a game of skill in courts throughout the country?
• What are the motives of Minnesota in taking the actions they have?

There have been moves to regulate online gaming in various parts of the country – including the California Online Poker Bill. The goal is obviously for state governments to stop leaving tax revenue from online gaming on the table.  Regulation means taxation.  Taxing online gaming obviously means substantial revenue for the regulating authorities.  However, it is difficult to tax and regulate if there are unregulated and untaxed gaming sites still in operation.  Therefore, Minnesota must ban current online gambling before they can tax and regulate.

My guess is Minnesota makes no distinction between online gambling (sportsbooks and online casino) and online poker.  To them it is all gambling, despite the rulings around the country indicating poker is a game of skill.  This is where the Poker Players’ Alliance will get involved.

Forums have already begun to light up with “how to get around these laws” posts, comments, and pleas.  Minnesota also doesn’t seem to be aware of the ease of which online gamblers can get around these laws, simply by the use of technology.

Minnesota (and Kentucky) has come with the wrong approach.  Trying to tear down what has existed for years will not work.  Trying to regulate and tax what has existed for years probably will.  I’m not sure how that helps state regulated brick and mortar casinos or Indian casinos, but I’m sure that with some thought, those entities could be incorporated into plans also.

As a poker affiliate, there is likely no short-term implication, and very little longer term implication.  However, this has always been a rapidly changing industry, and that statement may be subject to change.

Here is the link to the Star-Tribune online story: http://www.startribune.com/local/43985257.html and the link to the 2+2 thread about it is here.

The impact of this goes far beyond just Internet Gambling or Internet poker or Minnesota or Minnesota attempts to block online gambling.  This is a very real issue of free speech and the Constitution.  Can a state agency limit where we can and can’t go on the Internet.  What is the standard for doing so?  After all, if I can find some pretty disturbing things on the Internet – things which harm the safety of our society as a whole.  However, the government has no way to tax bomb making or setting-up a meth lab, so they respect freedom of speech.  However, once a great deal of money becomes involved, things change.

We will update this blog as the situation unfolds, and we see whether the ISP’s comply or fight, whether any third parties (the PPA, the EFF, or the ACLU) get involved, or whether something completely unexpected happens.