The “Daughter Test” of Government Prohibitions (And Why I’m so Angry About the U.S. Internet Poker Crackdown)

I was outraged a few weeks back when the U.S. government cracked down on internet poker. It took me a while to figure out why.

One of the most important roles of government is establishing a set of rules under which society will operate. Governments determine property rights and coordinate the provision of public goods. Some frowned upon activities are deemed illegal (e.g. homicide); other favored activities are encouraged through subsidies (e.g. home ownership, education).

Most of the time there is broad agreement as to which activities should be made criminal. Almost no one thinks that theft or violence against innocents is socially acceptable. There are, however, a few activities that fall into a gray area, like illicit drugs, prostitution, abortion, or gambling. Reasonable people can disagree as to whether it is appropriate to prohibit such activities, discourage them through taxation or other means, or simply let them flourish. A common feature of these gray-area activities are that they are typically “victimless” in the sense that, unlike a theft or murder, there is no easily discernible victim of the activity. When a drug dealer sells to an addict, both are happy to have carried out the transaction.

I’ve never really understood why I personally come down on one side or the other with respect to a particular gray-area activity.  Not that my opinion matters at all, but despite strong economic arguments in favor of drug legalization, the idea has always made me a little queasy. Conversely, although logic tells me that abortion as practiced in the U.S. doesn’t seem like such a great idea (see the end of the abortion chapter in Freakonomics for our arguments on this one), something in my heart makes me sympathetic to legalized abortion.

I would love it if my daughter became a poker champion (iStockphoto)

It wasn’t until the U.S. government’s crackdown on internet poker last week that I came to realize that the primary determinant of where I stand with respect to government interference in activities comes down to the answer to a simple question: How would I feel if my daughter were engaged in that activity?

If the answer is that I wouldn’t want my daughter to do it, then I don’t mind the government passing a law against it. I wouldn’t want my daughter to be a cocaine addict or a prostitute, so in spite of the fact that it would probably be more economically efficient to legalize drugs and prostitution subject to heavy regulation/taxation, I don’t mind those activities being illegal.

On the other hand, if my daughter had good reasons to want an abortion, I would want her to be able to have one, so I’m weakly in favor of abortion being legal, even though I put a lot of value on unborn fetuses.

The “daughter test” makes it clear why I find the U.S. government’s stance against internet poker so ridiculous.  When I imagine my daughter growing up to be a professional poker player, my reaction is to think that would be a great outcome! Maybe not the absolute best outcome (like her being a great economist or professional golfer, two things I’ve always dreamed of being), but certainly not a bad outcome at all.

More on the idiocy of trying to prohibit internet poker soon.

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  1. dpl says:

    Although I appreciate your honesty, personal taste is a bit of a flimsy argument for/against the legality of something. If we were establishing law on the basis of what fathers wanted for their daughters it would probably be illegal to marry a poor (and/or black) man.

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    • Marine Won says:

      Hidden due to low comment rating. Click here to see.

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      • teehee says:

        do all those neg ratings sorta tell you something, or are you still “honestly curious”?

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      • keith says:

        are you honest at all or just a troll cruising for a fight? And based on the general tone of such forums it is possible that the right side is the most unpopular.The biggest jerks sit and stir a cauldron of hate and prejudice like it was their afternoon tea

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      • Marine Won says:

        @teehee pos
        Still positively curious. Time is on my side.

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    • keith says:

      Bet you’d love bragging at the gym if your daughter married Lebron or Phil Ivy tho….. until it fell apart….then you’d turn all thoughtlessly and stereotypically judgmental again

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  2. Nick Malone says:

    So you can’t imagine your daughter becoming a successful retailer of legal drugs, rather than an addict? Or a gambling addict who can’t cover her expenses, rather than a professional card hustler?

    Mmmmm, that’s good confirmation bias!

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    • Joshua Northey says:

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      • Dan says:

        This logic makes sense only if you are advocating making ALL forms of gambling illegal (casinos, poker rooms, online poker, horse racing, lotteries, etc.).

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      • Justin says:

        What the hell kind of rake were you paying where almost half the money lost at the table winds up in the hands of the casino?

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      • Joshua Northey says:

        If there is a 4% rake/hand and the players are relatively equal the money will slosh quite a bit. So everyone comes to the table with $200 lets say.

        A few leave with ~$300, most leave with $0.

        Because I might win 30 hands and lose 20 on a good night, and the 4% is taken each time. Its not taken off the top. Plus there are tips, which is the standard practice, that adds at least another 2%. Surely you get that?

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      • DaninSeattle says:

        The casino doesn’t take a 75% rake, that’s ridiculous. Ultimately though, it’s just none of the government’s business. I don’t need big government to tell me what games I can and can’t play, that’s just not it’s role or place.

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      • dave says:

        $20 per hand. each player anties up $20, you put in 80 cents to the house, $19.20 into the pot.
        you play 10 hands, you just spent $8.00, 20 hand, $16 per person. that puts $80 into the house.
        5 players, $100 each. one takes home $300, one $100, one $20, two lose.

        that is 16% to the house.

        play a couple more rounds and you pay the same percentage in one sitting as much as you do on your credit card in a year.

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  3. roseonpolitics says:

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    • Ryan says:

      Gambling with fake money is not gambling….sorry.

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    • Dan says:

      >> because the companies were laundering the money people were supposed to be able to play with <<

      Uh – no, that's entirely incorrect. The DOJ is claiming that the way the online sites were processing transactions *amounts to* money laundering. There is no claim in the indictments that player funds were improperly used by the sites, and in fact there was a very robust business that both the sites and the players were happy with.

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  4. Miguel says:

    In other words, you have no solid argument, relying just on your own biases.

    Would you feel okay if your daughter was driven to bankruptcy while playing online poker? Then maybe you should want it to be banned. (Mind you, I don’t think this argument is cogent, and I favor legalization.)

    By your argument, if you were against your children drinking coffee, Starbucks should be outlawed. Frankly, your line of reasoning is quite lame: I’m astonished by the fact that you thought it good enough to make a post out of it. The only way I see it as Freakonomics material would be if you wrote a post describing it, and then tearing it down and rejecting it for being irrational.

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    • Steven says:

      If a person is driven to bankruptcy due to online poker they are not a “professional poker player” they are a “problem gambler”. Professional players never get into a situation where this is an option due to correct bankroll management.

      Do you feel because it is a possibility that someone could become addicted to online gambling the option and choice should be removed from society? So lets ban Casinos? And Alcohol for fear of alcoholics? And tobacco products for fear of people becoming addicted?

      If not why not? Too big an industry? Maybe we should wrap ourselves in cotton wool and let the government have responsibility for everything.

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      • Joshua Northey says:

        It sounds like you haven’t met many professional gamblers. Some always use good money management, at least as many chase and do not.

        You cannot just be tautological and say “professionals=people who succeed at gambling”. Some or even most of the professionals fail /quit eventually in my experience.

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      • Steven says:

        No your right i havn’t met many professional gamblers in the true sense, but i am a semi-professional poker player (in that i am at college and havn’t had to work in the 5 years i have been at school due to being able to consistently earn good money from online poker). I know many others who use it as a main source of income, and some who will not gamble on anything (except play poker). If you consider these people professional gamblers then consider me experienced.

        I do agree that it could be a problem for some people however i can find no logic in the contradictory US laws of allowing some online wagers for games of skill but not poker…

        I believe the bill that outlawed the transactions for online poker was piggybacked on a must-pass immigration law anyways and not approved outright on its own.

        But i am just glad that i live in Europe where our laws are consistent not piggybacked in based on individual prejudices.

        If gambling is a problem -> ban it. If not -> legalise it. Why the grey area?!

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      • Steven says:

        Although i do agree with you entirely, this is not a reason to outlaw it in my opinion. (Or even a selected sub-genre of gambling)

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      • Bryan says:

        You may call it tautological, but when it concerns poker this is a pretty good qualifier actually. I see many at the tables who are gambling in that they make incorrect bets hoping to get lucky. A “professional” knows how and when to bet to ensure a positive expected return. There is, of course, a lot of variance, but over the long run I know who will come out ahead.

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      • FrankDrakman says:

        Study after study has shown the greatest single negative to marijuana use is not health, or cognitive ability, or reduced motivation; it is law enforcement. You might say you don’t want your daughter to become a pothead (I don’t want mine to either), but by your standards, you would clearly be happy for her to become an alcoholic, since that’s legal, or a pole dancer, since that’s also legal. The amount of money wasted on police, courts, jails, etc. over marijuana is patently ridiculous, and obviously ineffective. I’m surprised that you, who is normally so clear-headed, can be so wooly in this area.

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      • Michael says:

        **If a person is driven to bankruptcy due to online poker they are not a “professional poker player” they are a “problem gambler”. Professional players never get into a situation where this is an option due to correct bankroll management.**

        Seriously??? Have you ever heard of Mike “The Mouth” Matusow, Jean Robert Bellande, Stu Ungar, even Daniel Negraneu, etc. Each a professional poker player, all having gone BROKE not just once, but multiple times. Except for Bellande, the others mentioned all have biographies out detailing this. Ungar is considered by most to be one of the top 5 best poker players to ever live and he died broke and a drug addict. Some professionals are bankroll nuts, like Chris Ferguson or Phil Laak, but many more are not.

        I was an avid online player (until the crackdown), and still play in the casinos so don’t think I’m a poker hater. Just wanted to set the record straight that your idea that pro’s don’t go bankrupt is innacurate. Many have to go back home and start over building a bankroll in small home games, while others get backed (money is staked) by someone else until they are able to start playing with their own money again.

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      • dave says:

        cotton wool ?

        please ban that as it comes from animals and animals are harmed. do you know how nasty razor burn can be ? !!!!!

        we need more laws and regulations, the 82 thousand pages of regulations from the gov’t in 2011 was a few thousand short.

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  5. Tito says:

    Really? That is your guide as to what should be legal?

    There a ton of things that I won’t let my daughters do, that should continue to remain legal. For starters: eating nothing but ice cream and watching 5 hours of TV a day. I’m not ok with either of them becoming an alcoholic, but I think alcohol should be legal.

    What about all the parents that would be horrified if their daughter (or son) started playing poker? Irresponsible gambling can ruin lives, just like irresponsible drinking/drug use, irresponsible video game playing or irresponsible sex.

    If you want to enjoy your particular vice (gambling), then it is important to accept (and fight for) other people’s vices, even ones you don’t choose yourself.

    Government is not and should not be “a parent”.

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    • Metalate says:

      There’s a big difference between “things I won’t let me daughter do” (your words) and things “I wouldn’t want my daughter to do” (his actual wording). My sense is that he means “would I be very disappointed/distraught if my daughter, when she is old enough to make decisions on her own, chose this.

      Does it make things different if you change “daughter” to “wife”?

      When my daughter is an adult, I may wish she would do otherwise, but I really wouldn’t care much if she is a loving, productive, successful person who also watches 5 hours of TV or eats lots of ice cream. Same with a tatoo. Same with lots of other stuff.

      But if she laundered money for a living, or led a neo-Nazi group, my feelings would be very different.

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  6. Tony Arko says:

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  7. Mitch says:

    Do stripping and tattoos pass the daughter test? If not, do you feel they should be outlawed?

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  8. Eric Sun says:

    To the comments – He wasn’t trying to use the “daughter test” as an argument of why the poker crackdown should not have happened. It simply was a explanation for why he would unknowingly fall on a certain side of an issue (despite the logical/rational arguments that he knew supported the other side).

    As a professional poker player, it pleases me that you could accept if your daughter chose that career path! Many other parents, due to preconceptions and the bad connotation of risk (especially when it comes to gambling) feel differently than you. I can infer that you recognize poker as a game of skill and not simply roulette or another game of pure chance. Which it most certainly is – please contact me if you want to discuss this deeper!

    No need to ask my stance on the poker crackdown (currently have a fair share of money in limbo), but hopefully this can lead to positive future changes. Entertaining article, bookmarked!

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    • jay wiley says:

      everyone here has some well thought out arguments in both directions.i think everyone misses the most important point of all here,that is its my money i earn it,the government taxes it,once they already take thier fare share .the government has no right to tell me what i can or cannot do with MY MONEYif i choose to give it to charity and that puts me in the poor house no one wants me to get in a 12 step program for that.or maybe if i give it all to the church and cant pay my bills they should out law church,this is monumentally stupid.if someone spending 50 dollars a month playing poker can be breaking the law,whats next.i spend money going gold minning,its a hobby .next they will outlaw that,oh crap in calif they already did outlaw suction the bottom line here is what ever my daughters do (i have 3)the only thing i absoultley forbid is them giving any money to political canaidates.

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