Mass. AG Martha Coakley Institutes Permanent Ban On “Internet Café” Gambling

Back in April of this year Massachusetts Attorney General Martha Coakley issued emergency regulations prohibiting Internet gambling at “cyber cafés” and “phone card businesses,” claiming the regulations were needed to “protect consumers.” Now, despite complaints from businesses targeted by these regulations, Coakley has instituted a permanent ban on the operation of the establishments, in particular “where a gambling purpose predominates over the bona fide sale of bona fide goods or services.” Interestingly this ban comes at a time when Massachusetts legislature, facing tight economic times, has cut upwards of $3 billion from the state’s budget since fiscal year 2009. Projections are the 2012 budget will continue that trend.

The aforementioned circumstances make the decision to ban these businesses all the more confusing. Colleagues here at CEI have discussed at length the nonsensical nature of these regulations and the benefits that can accrue by legalizing Internet gambling. In this particular case, there are questions as to whether the activities were violations of Massachusetts law in the first place, as Coakley claims. Legislators and the governor meanwhile are engaged in “closed-door” sessions considering the approval of new casinos and the placement of slot machines at race tracks. There’s no inconsistency there.

But let’s assume for the sake of argument that these businesses were run as a pretext for “illicit online gambling,” and that they are illegal. Is this prohibition worth the lack of regard for personal liberty, let alone the administrative costs of enforcement? In this instance, the ban shutters businesses that are providing consumers a service. Thus, it harms consumers, who are deprived of a service they desire, and indications are these businesses are quite popular with the public. The ban also hurts these businesses, which are forced to either shutdown or find alternative means acquiring revenue. Never mind the fact that two of these businesses created 12 jobs, doing something for the local community that legislators are seemingly incapable of. Finally, it hurts the taxpayers, who must finance the enforcement of this prohibition that really serves no interest whatsoever.

Ultimately, the legalization of online gambling would benefit consumers and the economy. The continued ban does a disservice to taxpayers, who ought to be able to decide how to spend their time and money without needless interference from meddlesome regulators. Until that revelation dawns on lawmakers, thousands of disappointed Massachusetts citizens will be searching for new ways to spend their leisure time.