Friday, November 29, 2013
Thursday, November 28, 2013
Monday, November 25, 2013
The Munich Agreement
The Munich Agreement
October 5, 1938. House of CommonsIf I do not begin this afternoon by paying the usual, and indeed almost invariable, tributes to the Prime Minister for his handling of this crisis, it is certainly not from any lack of personal regard. We have always, over a great many years, had very pleasant relations, and I have deeply understood from personal experiences of my own in a similar crisis the stress and strain he has had to bear; but I am sure it is much better to say exactly what we think about public affairs, and this is certainly not the time when it is worth anyone's while to court political popularity.We had a shining example of firmness of character from the late First Lord of the Admiralty two days ago. He showed that firmness of character which is utterly unmoved by currents of opinion, however swift and violent they may be. My hon. Friend the Member for South-West Hull (Mr. Law), to whose compulsive speech the House listened on Monday, was quite right in reminding us that the Prime Minister has himself throughout his conduct of these matters shown a robust indifference to cheers or boos and to the alternations of criticism or applause. If that be so, such qualities and elevation of mind should make it possible for the most severe expressions of honest opinion to be interchanged in this House without rupturing personal relations, and for all points of view to receive the fullest possible expression. Having thus fortified myself by the example of others, I will proceed to emulate them. I will, therefore, begin by saying the most unpopular and most unwelcome thing. I will begin by saying what everybody would like to ignore or forget but which must nevertheless be stated, namely, that we have sustained a total and unmitigated defeat, and that France has suffered even more than we have. The utmost my right hon. Friend the Prime Minister has been able to secure by all his immense exertions, by all the great efforts and mobilisation which took place in this country, and by all the anguish and strain through which we have passed in this country, the utmost he has been able to gain for Czechoslovakia in the matters which were in dispute has been that the German dictator, instead of snatching the victuals from the table, has been content to have them served to him course by course. The Chancellor of the Exchequer [Sir John Simon] said it was the first time Herr Hitler had been made to retract - I think that was the word - in any degree. We really must not waste time after all this long Debate upon the difference between the positions reached at Berchtesgaden, at Godesberg and at Munich. They can be very simply epitomised, if the House will permit me to vary the metaphor. £1 was demanded at the pistol's point. When it was given, £2 were demanded at the pistol's point. Finally, the dictator consented to take £1 17s. 6d. and the rest in promises of goodwill for the future. Now I come to the point, which was mentioned to me just now from some quarters of the House, about the saving of peace. No one has been a more resolute and uncompromising struggler for peace than the Prime Minister. Everyone knows that. Never has there been such instance and undaunted determination to maintain and secure peace. That is quite true. Nevertheless, I am not quite clear why there was so much danger of Great Britain or France being involved in a war with Germany at this juncture if, in fact, they were ready all along to sacrifice Czechoslovakia. The terms which the Prime Minister brought back with him could easily have been agreed, I believe, through the ordinary diplomatic channels at any time during the summer. And I will say this, that I believe the Czechs, left to themselves and told they were going to get no help from the Western Powers, would have been able to make better terms than they have got after all this tremendous perturbation; they could hardly have had worse. There never can be any absolute certainty that there will be a fight if one side is determined that it will give way completely. When one reads the Munich terms, when one sees what is happening in Czechoslovakia from hour to hour, when one is sure, I will not say of Parliamentary approval but of Parliamentary acquiescence, when the Chancellor of the Exchequer makes a speech which at any rate tries to put in a very powerful and persuasive manner the fact that, after all, it was inevitable and indeed righteous: when we say all this, and everyone on this side of the House, including many members of the Conservative Party who are vigilant and careful guardians of the national interest, is quite clear that nothing vitally affecting us was at stake, it seems to me that one must ask, What was all the trouble and fuss about? The resolve was taken by the British and the French Governments. Let me say that it is very important to realise that it is by no means a question which the British Government only have had to decide. I very much admire the manner in which, in the House, all references of a recriminatory nature have been repressed. But it must be realised that this resolve did not emanate particularly from one or other of the Governments but was a resolve for which both must share in common the responsibility. When this resolve was taken and the course was followed - you may say it was wise or unwise, prudent or short-sighted - once it had been decided not to make the defence of Czechoslovakia a matter of war, then there was really no reason, if the matter had been handled during the summer in the ordinary way, to call into being all this formidable apparatus of crisis. I think that point should be considered. We are asked to vote for this Motion which has been put upon the Paper, and it is certainly a Motion couched in very uncontroversial terms, as, indeed, is the Amendment moved from the Opposition side. I cannot myself express my agreement with the steps which have been taken, and as the Chancellor of the Exchequer has put his side of the case with so much ability I will attempt, if I may be permitted, to put the case from a different angle. I have always held the view that the maintenance of peace depends upon the accumulation of deterrents against the aggressor, coupled with a sincere effort to redress grievances. Herr Hitler's victory, like so many of the famous struggles that have governed the fate of the world, was won upon the narrowest of margins. After the seizure of Austria in March we faced this problem in our Debates. I ventured to appeal to the Government to go a little further than the Prime Minister went, and to give a pledge that in conjunction with France and other Powers they would guarantee the security of Czechoslovakia while the Sudeten-Deutsch question was being examined either by a League of Nations Commission or some other impartial body, and I still believe that if that course had been followed events would not have fallen into this disastrous state. I agree very much with my right hon. Friend the Member for Sparkbrook (Mr. Amery) when he said on that occasion - "Do one thing or the other; either say you will disinterest yourself in the matter altogether or take the step of giving a guarantee which will have the greatest chance of securing protection for that country." France and Great Britain together, especially if they had maintained a close contact with Russia, which certainly was not done, would have been able in those days in the summer, when they had the prestige, to influence many of the smaller states of Europe; and I believe they could have determined the attitude of Poland. Such a combination, prepared at a time when the German dictator was not deeply and irrevocably committed to his new adventure, would, I believe, have given strength to all those forces in Germany which resisted this departure, this new design. They were varying forces; - those of a military character which declared that Germany was not ready to undertake a world war, and all that mass of moderate opinion and popular opinion which dreaded war, and some elements of which still have some influence upon the Government. Such action would have given strength to all that intense desire for peace which the helpless German masses share with their British and French fellow men, and which, as we have been reminded, found a passionate and rarely permitted vent in the joyous manifestations with which the Prime Minister was acclaimed in Munich. All these forces, added to the other deterrents which combinations of Powers, great and small, ready to stand firm upon the front of law and for the ordered remedy of grievances, would have formed, might well have been effective. Between submission and immediate war there was this third alternative, which gave a hope not only of peace but of justice. It is quite true that such a policy in order to succeed demanded that Britainshould declare straight out and a long time beforehand that she would, with others, join to defend Czechoslovakia against an unprovoked aggression. His Majesty's Government refused to give that guarantee when it would have saved the situation, yet in the end they gave it when it was too late, and now, for the future, they renew it when they have not the slightest power to make it good. All is over. Silent, mournful, abandoned, broken, Czechoslovakia recedes into the darkness. She has suffered in every respect by her association with the Western democracies and with the League of Nations, of which she has always been an obedient servant. She has suffered in particular from her association with France, under whose guidance and policy she has been actuated for so long. The very measures taken by His Majesty's Government in the Anglo-French Agreement to give her the best chance possible, namely, the 50 per cent, clean cut in certain districts instead of a plebiscite, have turned to her detriment, because there is to be a plebiscite too in wide areas, and those other Powers who had claims have also come down upon the helpless victim. Those municipal elections upon whose voting the basis is taken for the 50 per cent. cut were held on issues which had nothing to do with joining Germany. When I saw Herr Henlein over here he assured me that was not the desire of his people. Positive statements were made that it was only a question of home rule, of having a position of their own in the Czechoslovakian State. No one has a right to say that the plebiscite which is to be taken in areas under Saar conditions, and the clean-cut of the 50 per cent. areas - that those two operations together amount in the slightest degree to a verdict of self-determination. It is a fraud and a farce to invoke that name. We in this country, as in other Liberal and democratic countries, have a perfect right to exalt the principle of self-determination, but it comes ill out of the mouths of those in totalitarian states who deny even the smallest element of toleration to every section and creed within their bounds. But, however you put it, this particular block of land, this mass of human beings to be handed over, has never expressed the desire to go into the Nazi rule. I do not believe that even now, if their opinion could be asked, they would exercise such an opinion. What is the remaining position of Czechoslovakia? Not only are they politically mutilated, but, economically and financially, they are in complete confusion. Their banking, their railway arrangements, are severed and broken, their industries are curtailed, and the movement of their population is most cruel. The Sudeten miners, who are all Czechs and whose families have lived in that area for centuries, must now flee into an area where there are hardly any mines left for them to work. It is a tragedy which has occurred. There must always be the most profound regret and a sense of vexation in British hearts at the treatment and the misfortune which have overcome the Czechoslovakian Republic. They have not ended here. At any moment there may be a hitch in the programme. At any moment there may be an order for Herr Goebbels to start again his propaganda of calumny and lies; at any moment an incident may be provoked, and now that the fortress line is turned away what is there to stop the will of the conqueror? Obviously, we are not in a position to give them the slightest help at the present time, except what everyone is glad to know has been done, the financial aid which the Government have promptly produced. I venture to think that in future the Czechoslovak State cannot be maintained as an independent entity. I think you will find that in a period of time which may be measured by years, but may be measured only by months, Czechoslovakia will be engulfed in the Nazi regime. Perhaps they may join it in despair or in revenge. At any rate, that story is over and told. But we cannot consider the abandonment and ruin of Czechoslovakia in the light only of what happened only last month. It is the most grievous consequence of what we have done and of what we have left undone in the last five years - five years of futile good intentions, five years of eager search for the line of least resistance, five years of uninterrupted retreat of British power, five years of neglect of our air defences. Those are the features which I stand here to expose and which marked an improvident stewardship for which Great Britain and France have dearly to pay. We have been reduced in those five years from a position of security so overwhelming and so unchallengeable that we never cared to think about it. We have been reduced from a position where the very word "war" was considered one which could be used only by persons qualifying for a lunatic asylum. We have been reduced from a position of safety and power - power to do good, power to be generous to a beaten foe, power to make terms with Germany, power to give her proper redress for her grievances, power to stop her arming if we chose, power to take any step in strength or mercy or justice which we thought right - reduced in five years from a position safe and unchallenged to where we stand now. When I think of the fair hopes of a long peace which still lay before Europe at the beginning of 1933 when Herr Hitler first obtained power, and of all the opportunities of arresting the growth of the Nazi power which have been thrown away, when I think of the immense combinations and resources which have been neglected or squandered, I cannot believe that a parallel exists in the whole course of history. So far as this country is concerned the responsibility must rest with those who have had the undisputed control of our political affairs. They neither prevented Germany from rearming, nor did they rearm themselves in time. They quarrelled with Italy without saving Ethiopia. The exploited and discredited the vast institution of the League of Nations and they neglected to make alliances and combinations which might have repaired previous errors, and thus they left us in the hour of trial without adequate national defence or effective international security. In my holiday I thought it was a chance to study the reign of King Ethelred the Unready. The House will remember that that was a period of great misfortune, in which, from the strong position which we had gained under the descendants of King Alfred, we fell very swiftly into chaos. It was the period of Danegeld and of foreign pressure. I must say that the rugged words of the Anglo-Saxon Chronicle, written a thousand years ago, seem to me apposite, at least as apposite as those quotations from Shakespeare with which we have been regaled by the last speaker from the Opposition Bench. Here is what the Anglo-Saxon Chronicle said, and I think the words apply very much to our treatment of Germany and our relations with her. "All these calamities fell upon us because of evil counsel, because tribute was not offered to them at the right time nor yet were they resisted; but when they had done the most evil, then was peace made with them." That is the wisdom of the past, for all wisdom is not new wisdom. I have ventured to express those views in justifying myself for not being able to support the Motion which is moved to-night, but I recognise that this great matter of Czechoslovakia, and of British and French duty there, has passed into history. New developments may come along, but we are not here to decide whether any of those steps should be taken or not. They have been taken. They have been taken by those who had a right to take them because they bore the highest executive responsibility under the Crown. Whatever we may think of it, we must regard those steps as belonging to the category of affairs which are settled beyond recall. The past is no more, and one can only draw comfort if one feels that one has done one's best to advise rightly and wisely and in good time. I, therefore, turn to the future, and to our situation as it is to-day. Here, again, I am sure I shall have to say something which will not be at all welcome. We are in the presence of a disaster of the first magnitude which has befallen Great Britain and France. Do not let us blind ourselves to that. It must now be accepted that all the countries of Central and Eastern Europe will make the best terms they can with the triumphant Nazi power. The system of alliances in Central Europe upon which France has relied for her safety has been swept away, and I can see no means by which it can be reconstituted. The road down the Danube Valleyto the Black Sea, the road which leads as far as Turkey, has been opened. In fact, if not in form, it seems to me that all those countries of Middle Europe, all those Danubian countries, will, one after another, be drawn into this vast system of power politics - not only power military politics but power economic politics - radiating from Berlin, and I believe this can be achieved quite smoothly and swiftly and will not necessarily entail the firing of a single shot. If you wish to survey the havoc of the foreign policy of Britain and France, look at what is happening and is recorded each day in the columns of The Times. Why, I read this morning about Yugoslavia - and I know something about the details of that country – "The effects of the crisis for Yugoslavia can immediately be traced. Since the elections of 1935, which followed soon after the murder of King Alexander, the Serb and Croat Opposition to the Government of Dr. Stoyadinovitch have been conducting their entire campaign for the next elections under the slogan: 'Back to France, England, and the Little Entente; back to democracy.' The events of the past fortnight have so triumphantly vindicated Dr. Stoyadinovitch's policy...." – his is a policy of close association with Germany – "that the Opposition has collapsed practically overnight; the new elections, the date of which was in doubt, are now likely to be held very soon and can result only in an overwhelming victory for Dr. Stoyadinovitch's Government." Here was a country which, three months ago, would have stood in the line with other countries to arrest what has occurred. Again, what happened in Warsaw? The British and French Ambassadors visited the Foreign Minister, Colonel Beck, or sought to visit him, in order to ask for some mitigation in the harsh measures being pursued against Czechoslovakia about Teschen. The door was shut in their faces, The French Ambassador was not even granted an audience and the British Ambassador was given a most curt reply by a political director. The whole matter is described in the Polish Press as a political indiscretion committed by those two powers, and we are to-day reading of the success of Colonel Beck's blow. I am not forgetting, I must say, that it is less than twenty years since British and French bayonets rescued Poland from the bondage of a century and a half. I think it is indeed a sorry episode in the history of that country, for whose freedom and rights so many of us have had warm and long sympathy. Those illustrations are typical. You will see, day after day, week after week, entire alienation of those regions. Many of those countries, in fear of the rise of the Nazi power, have already got politicians, Ministers, Governments, who were pro-German, but there was always an enormous popular movement in Poland, Rumania, Bulgaria, and Yugoslavia which looked to the Western democracies and loathed the idea of having this arbitrary rule of the totalitarian system thrust upon them, and hoped that a stand would be made. All that has gone by the board. We are talking about countries which are a long way off. But what will be the position, I want to know, of France and England this year and the year afterwards? What will be the position of that Western front of which we are in full authority the guarantors? The German army at the present time is more numerous than that of France, though not nearly so matured or perfected. Next year it will grow much larger, and its maturity will be more complete. Relieved from all anxiety in the East, and having secured resources which will greatly diminish, if not entirely remove, the deterrent of a naval blockade, the rulers of Nazi Germany will have a free choice open to them as to what direction they will turn their eyes. If the Nazi dictator should choose to look westward, as he may, bitterly will France and England regret the loss of that fine army of ancient Bohemia which was estimated last week to require not fewer than 30 German divisions for its destruction. Can we blind ourselves to the great change which has taken place in the military situation, and to the dangers we have to meet? We are in process, I believe, of adding in four years, four battalions to the British Army. No fewer than two have already been completed. Here are at least 30 divisions which must now be taken into consideration upon the French front, besides the 12 that were captured when Austria was engulfed. Many people, no doubt, honestly believe that they are only giving away the interests of Czechoslovakia, whereas I fear we shall find that we have deeply compromised, and perhaps fatally endangered, the safety and even the independence of Great Britain and France. This is not merely a question of giving up the German colonies, as I am sure we shall be asked to do. Nor is it a question only of losing influence in Europe. It goes far deeper than that. You have to consider the character of the Nazi movement and the rule which it implies. The Prime Minister desires to see cordial relations between this country and Germany. There is no difficulty at all in having cordial relations between the peoples. Our hearts go out to them. But they have no power. But never will you have friendship with the present German Government. You must have diplomatic and correct relations, but there can never be friendship between the British democracy and the Nazi power, that power which spurns Christian ethics, which cheers its onward course by a barbarous paganism, which vaunts the spirit of aggression and conquest, which derives strength and perverted pleasure from persecution, and uses, as we have seen, with pitiless brutality the threat of murderous force. That power cannot ever be the trusted friend of the British democracy. What I find unendurable is the sense of our country falling into the power, into the orbit and influence of Nazi Germany, and of our existence becoming dependent upon their good will or pleasure. It is to prevent that that I have tried my best to urge the maintenance of every bulwark of defence - first, the timely creation of an Air Force superior to anything within striking distance of our shores; secondly, the gathering together of the collective strength of many nations; and thirdly, the making of alliances and military conventions, all within the Covenant, in order to gather together forces at any rate to restrain the onward movement of this power. It has all been in vain. Every position has been successively undermined and abandoned on specious and plausible excuses. We do not want to be led upon the high road to becoming a satellite of the German Nazi system of European domination. In a very few years, perhaps in a very few months, we shall be confronted with demands with which we shall no doubt be invited to comply. Those demands may affect the surrender of territory or the surrender of liberty. I foresee and foretell that the policy of submission will carry with it restrictions upon the freedom of speech and debate in Parliament, on public platforms, and discussions in the Press, for it will be said - indeed, I hear it said sometimes now - that we cannot allow the Nazi system of dictatorship to be criticised by ordinary, common English politicians. Then, with a Press under control, in part direct but more potently indirect, with every organ of public opinion doped and chloroformed into acquiescence, we shall be conducted along further stages of our journey. It is a small matter to introduce into such a Debate as this, but during the week I heard something of the talk of Tadpole and Taper. They were very keen upon having a general election, a sort of, if I may say so, inverted khaki election. I wish the Prime Minister had heard the speech of my hon. and gallant friend the Member for the Abbey Division of Westminster (Sir Sidney Herbert) last night. I know that no one is more patient and regular in his attendance than the Prime Minister, and it is marvellous how he is able to sit through so much of our Debates, but it happened that by bad luck he was not here at that moment. I am sure, however, that if he had heard my hon. and gallant Friend's speech he would have felt very much annoyed that such a rumour could even have been circulated. I cannot believe that the Prime Minister, or any Prime Minister, possessed of a large working majority, would be capable of such an act of historic, constitutional indecency. I think too highly of him. Of course, if I have misjudged him on the right side, and there is a dissolution on the Munich Agreement, on Anglo-Nazi friendship, of the state of our defences and so forth, everyone will have to fight according to his convictions, and only a prophet could forecast the ultimate result; but, whatever the result, few things could be more fatal to our remaining chances of survival as a great Power than that this country should be torn in twain upon this deadly issue, of foreign policy at a moment when, whoever the Ministers may be, united effort can alone make us safe. I have been casting about to see how measures can be taken to protect us from this advance of the Nazi power, and to secure those forms of life which are so dear to us. What is the sole method that is open? The sole method that is open is for us to regain our old island independence by acquiring that supremacy in the air which we were promised, that security in our air defences which we were assured we had, and thus to make ourselves an island once again. That, in all this grim outlook, shines out as the overwhelming fact. An effort at rearmament the like of which has not been seen ought to be made forthwith, and all the resources of this country and all its united strength should be bent to that task. I was very glad to see that Lord Baldwin yesterday in the House of Lords said that he would mobilise industry to-morrow. But I think it would have been much better if Lord Baldwin had said that two and a half years ago, when everyone demanded a Ministry of Supply. I will venture to say to hon. Gentlemen sitting here behind the Government Bench, hon. Friends of mine, whom I thank for the patience with which they have listened to what I have to say, that they have some responsibility for all this too, because, if they had given one tithe of the cheers they have lavished upon this transaction of Czechoslovakia to the small band of Members, who were endeavouring to get timely rearmament set in motion, we should not now be in the position in which we are. Hon. Gentlemen opposite, and hon. Members on the Liberal benches, are not entitled to throw these stones. I remember for two years having to face, not only the Government's depreciation, but their stern disapproval. Lord Baldwin has now given the signal, tardy though it may be; let us at least obey it. After all, there are no secrets now about what happened in the air and in the mobilisation of our anti-aircraft defences. These matters have been, as my hon. and gallant Friend the Member for the Abbey Division said, seen by thousands of people. They can form their own opinions of the character of the statements which have been persistently made to us by Ministers on this subject. Who pretends now that there is air parity with Germany? Who pretends now that our anti-aircraft defences were adequately manned or armed? We know that the German General Staff are well informed upon these subjects, but the House of Commons has hitherto not taken seriously its duty of requiring to assure itself on these matters. The Home Secretary said the other night that he would welcome investigation. Many things have been done which reflect the greatest credit upon the administration. But the vital matters are what we want to know about. I have asked again and again during these three years for a secret Session where these matters could be thrashed out, or for an investigation by a Select Committee of the House, or for some other method. I ask now that, when we meet again in the autumn, that should be a matter on which the Government should take the House into its confidence, because we have a right to know where we stand and what measures are being taken to secure our position. I do not grudge our loyal, brave people, who were ready to do their duty no matter what the cost, who never flinched under the strain of last week - I do not grudge them the natural, spontaneous outburst of joy and relief when they learned that the hard ordeal would no longer be required of them at the moment; but they should know the truth. They should know that there has been gross neglect and deficiency in our defences; they should know that we have sustained a defeat without a war, the consequences of which will travel far with us along our road; they should know that we have passed an awful milestone in our history, when the whole equilibrium of Europe has been deranged, and that the terrible words have for the time being been pronounced against the Western democracies: "Thou art weighed in the balance and found wanting." And do not suppose that this is the end. This is only the beginning of the reckoning. This is only the first sip, the first foretaste of a bitter cup which will be proffered to us year by year unless by a supreme recovery of moral health and martial vigour, we arise again and take our stand for freedom as in the olden time. |
Sunday, November 24, 2013
Thursday, November 21, 2013
Wednesday, November 20, 2013
New Fed Online Gaming Bills
Latest federal Internet gambling bill proposes tax
Posted: Monday, November 18, 2013 11:45 am | Updated: 2:03 pm, Mon Nov 18, 2013.
If Congress makes no progress on a national framework for online gambling this session, it won't be for a lack of legislation.
Two lawmakers introduced bills over the summer that would legalize some form of Internet gambling nationwide. Last week, Rep. Jim McDermott, a Democrat from Washington, introduced a bill that would tax federally-sanctioned online wagering.
The bill, dubbed the Internet Gambling Regulation and Tax Enforcement Act of 2013, could compel online operators to hand over up to 12 cents of every dollar players deposited. The federal government would take four cents. The state or tribe in which the gambler is playing could also opt to collect 8 cents on the dollar. McDermott introduced similar bills in 2010 and 2011, without success.
This time, the measure is meant as companion legislation to a bill introduced in June by Republican New York Congressman Peter King. King's proposal, called the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2013, would open the door to all forms of casino games.
In July, Rep. Joe Barton, a Texas Republican, introduced a more limited bill that would pave the way for states to legalize online poker without fear of federal intervention. Barton's legislation, dubbed the Internet Poker Freedom Act, would only apply to poker and would allow states to opt out of the federal system.
Capitol Hill could see another legislative push for online gambling before the session is out. Democratic Sen. Harry Reid of Nevada, who has said the issue is one of the most important that his home state faces, is working on new legislation with his Nevada colleague, Republican Sen. Dean Heller.
Gamblers wanting to make wagers from the privacy of their homes have had few options in recent years. The federal government cracked down definitively on Internet gambling in 2011. But the same year, the U.S. Justice Department issued a ruling making online gambling legal so long as it's permitted on the state level.
Congress flirted with an online gambling bill in 2012, but industry infighting and partisan disagreement ultimately doomed it. When that legislation failed, states began moving ahead on their own.
Nevada, New Jersey and Delaware have now legalized some kind of online gambling, and legislatures in other states are weighing the issue.
Morgan Stanley predicts that by 2020, online gambling in the U.S. will produce the same amount of revenue as Las Vegas and Atlantic City markets combined: $9.3 billion.
Industry players hailed the McDermott bill as a sign that Congress may finally move forward with comprehensive Internet gambling regulation.
Michael Waxman, spokesman for Safe and Secure Internet Gambling Initiative, said that together, the year's gambling bills could create a fairer regulatory climate.
"With all of the fighting in D.C. over funding issues, you'd hope this opportunity to generate billions in economic activity and new government revenues will get serious consideration," he said.
Tuesday, November 19, 2013
New US laws to make online gambling flourish? - News - World - The Voice of Russia: News, Breaking news, Politics, Economics, Business, Russia, International current events, Expert opinion, podcasts, Video
New US laws to make online gambling flourish? - News - World - The Voice of Russia: News, Breaking news, Politics, Economics, Business, Russia, International current events, Expert opinion, podcasts, Video
A new federal online gambling tax regime has been proposed in the US in response to the launch and pending launch of internet gambling in various states throughout the country. Internet gambling is currently raising its head after years of hiding in the shadow.
New Jersey is the first to kick off its online wagering November 26, becoming the most populous state to do so after Nevada and Delaware. California, Illinois and Pennsylvania are considering such moves.
Other states have become active since 2011, when the federal government signaled it would not block most forms of Internet wagering.
The move is expected to make money pour in the federal budget.
The launch in a handful of states “will release a floodgate of investor interest in the online space, and spur new states to open to reap tax dollars,” analyst Vaughan Lewis said in a note to clients.
Morgan Stanley estimated legal US online gambling revenues would reach $670 million in 2014, increasing to $9.3 billion in 2020.
The United States has a handful of gambling regulations. While casino gambling was only allowed in Nevada a few decades ago, New Jersey allowed casinos in Atlantic City in the 1970s and until recently, the federal government claimed that online gambling was unlawful. But a 2011 Justice Department legal opinion said only sports betting would be considered illegal.
Nevada authorized online poker in 2012, and Delaware and New Jersey passed laws allowing a full range of casino games.
Despite existing bans, Americans spent $2.6 billion on online gambling in 2012 in a global industry worth $33 billion, according to a study for the American Gaming Association, which represents commercial casino operators. The American Gaming Association has called for more comprehensive and less confusing federal rules, including banking regulations. Even though banks and other credit card issuers weren’t supposed to process gambling payments for US customers after the Unlawful Internet Gambling Enforcement Act (UIGEA) laws were passed in 2006, any online poker or casino player can tell you that sometimes, they did. However most major banks did comply, under threat of strict fines and penalties from the Department of Justice. So now that online gambling becomes fully legal in a handful of states, there is a risk that some banks will refuse to process payments to those regulated sites.
Most of the decisions to the individual issuing banks, meaning they can simply choose not to allow a transaction if they’re not comfortable with it, which appears to be the case with many online gambling deposits in those states that have regulated the industry.
“While we have long supported federal regulation versus state regulation, the most important point is that online gaming must be regulated to protect consumers and ensure the integrity of the games,” said association president Geoff Freeman.
Answering the calls, Representative Jim McDermott has introduced a bill to ensure taxes and fees are collected within a regulated regime. The Internet Gambling Regulation and Tax Enforcement Act of 2013 would create a 12% deposit tax that would be paid by licensed operators rather than players.The federal government would collect 4% of this tax, with the remaining 8% being distributed to qualified states and tribes in the federal regime.
The tax payable to states and tribes would remain dependent upon the location of the customer in the respective state or tribal area at the time they made their deposit.
Supporters of the new regime said that rather than using a Gross Gaming Revenue (GGR) as a basis for tax calculation in a multi-jurisdiction environment, a deposit tax approach would be better suited to an online gambling market. GGR is the amount wagered minus the winnings returned to players, a true measure of the economic value of gambling
Deposit tax is paid up front, creates transparency in the market and supports both revenue calculation and distribution across multiple jurisdictions based on a place of consumption methodology, bill advocates say.
However, online gambling critics warn of the dangers of unhindered expansion online — that geographic and age restrictions could be easily bypassed, and unsavory elements could use the systems to launder money.
“This is not just fun and games, it’s a question of national economic security,” said University of Illinois business professor John Kindt.
Kindt said the expansion of Internet gambling would simply be “a transfer of wealth, with no productivity gains,” and that those profiting would likely be offshore firms or organized crime.
“There are still things that can go wrong, even with controls in place,” added Steve Kenneally, vice president for regulatory compliance at the American Bankers Association.
Meanwhile, players are left trying to figure out how to deal with newly legal Internet gambling sites. Using geolocation technology, the systems require that gamblers be located within the state. “Once these states are successful within their borders, they will figure out how to pool players across state lines to take bets from each other, and a lot of other states will jump in,” said Whittier Law School professor I. Nelson Rose. “Within 10 years, I think we will see a very large portion of states will have Internet gambling,” he predicted.
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