BY Rafi Farber

I often call gaming the canary in the coal mine for the wider global economy. Here I’d like to go into that idea a little deeper. The import of that comparison is not necessarily laden in technical patterns, but rather within the broader concept of human liberty. The gambling industry is currently at the frontier of liberty. Meaning, it is right at the border between what governments allow and forbid. Whether you see governments as inherently good, necessary evils, or entirely unnecessary in the first place, there is no denying that government, however you may view it, is the quintessential resistance against human liberty on this planet. Whether that’s for good or for bad, that’s everybody’s individual call. But that’s what it is by nature of the fact that it is set up for the very purpose of restricting and regulating human activity.

So what does gaming as the canary in the coal mine really mean? According to economist Murray Rothbard, in his introduction to his opus on prerevolutionary America “Conceived in Liberty,” he begins with a preface, confessing his view on what he thinks is the actual stuff of human history (pages xv-xvi):

My own basic perspective on the history of man…is to place central importance on the great conflict which is eternally waged between Liberty and Power… I see the liberty of the individual not only as a great moral good in itself… but also as the necessary condition for the flowering of all the other goods that mankind cherishes: moral virtue, civilization, the arts and sciences, economic prosperity… But liberty has always been threatened by the encroachments of power, power which seeks to suppress, control, cripple, tax, and exploit the fruits of liberty and production. Power, then, the enemy of liberty, is consequently the enemy of all the other goods and fruits of civilization that mankind holds dear.

History then, according to Rothbard, is the unending battle between Power and Liberty. And which industry is on the very frontlines of the battle more so than gambling? As the canary, it is the first to experience tax hikes and extreme regulatory burdens. Bureaucrats test out their attempts at power grabs by first trying them out on gaming, to see if they work without damaging their hold on power and money. First, they tend to herd up the entire industry into a specialized zone so the state can keep close track of everything, charge anything they want for arbitrary licenses, and limit the industry’s spread. See Nevada, New Jersey, Macau, the Russian Primorye gambling region, the absolutely transparent idiocy of the Cambodian regime’s restrictions against gambling only for Cambodian citizens, but not for foreigners.

Then they extend their power grab to interfering directly, using the whole industry as a test case to see what they can get away with. The entire Macau crash of 2014 can be seen as a giant human experiment conducted by social engineers. What happens if we cut off the VIPs? Can we get away with it? The answer was no. So Beijing let up and Macau was freed a little bit. A crackdown like the Macau VIP crackdown of 2014 won’t happen again there, because Beijing already understands the consequences. The fact that Beijing actually did let up rather quickly is a great sign for human welfare in China.

In order to understand why, just take a look at Venezuela today. This is an absolute human catastrophe where Power just does not give up, and will not do so until it simply cannot hang on any longer and destroys itself. China already experienced this kind of human catastrophe in the late 1950’s when about 45 million people starved to death, so it knows more than Venezuela as to where the limits are. We can only hope that Xi Jinping’s realpolitik in terms of which of his power grabs he can get away with extends to his developing experiment with a Chinese national social credit scheme. Hopefully he won’t go “full retard” here and will emasculate the plan when it proves too damaging to his own credibility.

Getting back to the gaming industry, how it fares is often a weathervane for the state of liberty. The next Ground Zero looks to be the United Kingdom, where the LAC/ICE conferences happen to be taking place next month. Now let’s engage in a bit of decrypting. The battle between the European Union, represented by Brussels, and the United Kingdom, represented by the Brexit faction (not Theresa May, who in my opinion is sympathetic to Brussels) is essentially a civilized war, for now.

The UK’s people want to exit, stop paying the EU for the right to trade, and just continue trading without the fees, paid in lieu of tariffs and other restrictions. That’s Brexit in a nutshell. Brussels/May, want to keep the protection racket flowing for the Ruling Class. May’s deal is the only option, conveniently for her, a deal which, through the Orwellian term “backstop” keeps the UK in the EU without any pretense of a say in the Union’s operations, basically destroying the entire goal of the Brexiters and making Brexit pretty much the exact opposite of what they wanted in the first place.

If May’s deal does not pass and there’s a “Hard Brexit,” Brussels is threatening to essentially blockade the entire country as if it were in a real bona fide hot war Since the EU is pretty much run by Germany, this whole fight seems to be a more civilized version of Europe just before World War II. The trade war between Brussels and the UK is worse than the one between China and the United States. It’s just not being called a “trade war”, but that’s what it is.

As the days tick by to March and Article 50, it looks more and more likely that

  1. A) The vote on May’s plan will fail this month
    B) A second referendum will be called
    C) Brexit will be called off entirely

Brussels will have cemented its rule over Great Britain. At that point, we’ll see a generous relief rally in UK stocks as the fears of Brexit, mostly manufactured by threats and fearmongering nonsense about stockpiling drugs and whatnot, will abate. But shortly thereafter, this year most likely, the wounds from the ongoing EU debt crisis, which has worsened markedly over the past 9 years, will burst open, and Britain will be stuck in the middle of it instead of watching from the sidelines. At that point, in a liquidity crunch and desperate for money, the UK government will go after the gaming industry even harder, among others.

Watch closely, and let’s see if the yellow vests show up in the UK to say enough is enough, and say it with the right solutions. That is, not to raise taxes and regulations still more on “the rich” to try to shut people up that way, but to just…back…off and leave people and industries alone. While the US is showing some signs of progress with PASPA overturned (and hemp legalized), so far the signs aren’t good in the UK. The increase in POC taxes and the restriction on FOBTs in the name of morality, and UK gaming stocks are showing the signs of serious wear and tear. Let’s hope as a first step this year that the upcoming conferences go well and increase prosperity for everyone involved.

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