Self-interest under the guise of morality
In 1776 all public lotteries were consolidated in the Loterie Royale modeled on the very successful Lottery of the Roman States sponsored by the pope, and all private lotteries were outlawed. The reason given for the last step was to prevent the French from playing in the foreign lotteries, which were more attractive than their own, and thus losing foreign exchange. But one wonders if there was not another and more important reason lurking behind this act; namely, to augment the treasury's receipts at a time when the kingdom had a budget deficit of 37 million livres. (my emphasis)
Proponents of gambling prohibition will unsurprisingly claim to be serving other interests, not protecting state monopolies or otherwise limiting competition to established favorites. Typically, the cited interests are the young, the poor, compulsive gamblers — basically, those who can't take care of themselves and whose examples are used to threaten everyone with state paternalism, no matter how insignificant the problematic cases actually are, percentage-wise (and no matter how badly cause and effect may be confounded).
Very often, moral concerns have been expressed that gambling is wasteful and diverts people from more productive activities. Alongside this idea, one would formerly hear that gambling instills a poor work ethic, or encourages "idleness", or places too much emphasis on chance over providence. Even here, real interests can be masked. Although the English laws of 1699, 1826 and 1906 were claimed to help the poor, there is reason to suspect that their establishment had more to do with maintaining the status quo and keeping the poor in their place. The higher classes had more to lose, and so had less of a need for variance than the poor. The 1906 law, orginally known as a "class law", was eventually recognized as outdated and unenforceable, and was discarded in 1960 when the Betting and Gambling Act legalized betting shops in the UK.
Over here in The Colonies, the 45 year-old Wire Act is showing its age. Turning the tide against prohibition must start by defeating the Goodlatte/Leach bill in the Senate, which fortunately seems unlikely to come up for a vote this session, or be passed by 2007. Considering their numbers, the information at their disposal, and their combined talents, there is no need for online gambling, poker and prediction market enthusiasts and businesses to remain passive. It should be feasible to: 1) marshal funds from these dispersed groups, 2) model the legislature with respect to special interest contributions and voting bloc patterns using tools like opensecrets.org, and 3) contact or deploy contributions to those legislators most likely to swing relevant votes.
This framework is crude and simplistic, but it's a start. Earlier in the year, the idea of a prediction market industry group was floated, perhaps along the lines of an IGC, but not much became of it. As I suspected, a crisis might be required to spur follow-through on such a plan. There is still plenty of time.
(As a footnote, I don't mean to imply that all of politics is reducible to self-interest, nor that there is no difference between productive work and gambling.)