Utah Republican Congressman Jason Chaffetz recently threw his hat in the ring in a bid to replace Speaker John Boehner, after House Majority Leader Kevin McCarthy’s (R-Calif.) gaffe regarding the Benghazi investigation made the race far more open. As my colleague Jessica Melugin notes, Chaffetz considers himself one of the more tech-savvy members of Congress and a strong defender of the Tenth Amendment.
Yet, Chaffetz has twice introduced the Restoration of America’ Wire Act (RAWA, H.R. 707), which would allow the federal government to overturn state laws that govern a wholly intrastate activity. Internet gambling has been around since the day the Internet made it into American homes. And Republican lawmakers have been trying to ban it—without much luck. So much for state sovereignty.
There is no federal law directly governing Internet gambling, so the task has been left to the Department of Justice to interpret existing federal gaming laws. During the Clinton administration, DOJ defined online sports betting as unlawful. Then during George W. Bush’s administration, DOJ determined that all online gambling was illegal under U.S. law—an interpretation that held until 2011 when, pressed by state lotteries, the Obama DOJ returned to the previously held understanding: As long as the gambling is intrastate and not related sports betting, it is not illegal under federal law.
This opened the door for states to legalize intrastate online gambling. Three states—New Jersey, Delaware, and Nevada—have done so. In addition, more than a dozen states have some form of lottery games available online.
Unsurprisingly, casino magnate and GOP mega-donor Sheldon Adelson has poured millions of dollars into promoting legislation meant to crush the burgeoning online competition to his business. What is surprising is who in Congress is now pushing his federalism-trampling bill.
“I personally am opposed to gambling,” Chaffetz said in the March hearing of RAWA, “but recognize the right of others and other states, if they so choose, our neighbors, good friends in Nevada if they so choose to have at it.” Yet, his bill would not let states “have at it” if they want. It would federally prohibit states from regulating online gambling, even if it is only available for people within their borders. How does he reconcile his stance on “states’ rights” with a bill that violates that very principle?
“I believe it’s a states’ rights bill,” he said at the same hearing. “The state of Utah does not want gambling within its borders … and it is naïve at best to think that you can suddenly just create these fictitious borders because of technology and prohibit them coming into the state of Utah.” In other words, Chaffetz seems to believe that all online activity is inherently interstate and therefore subject to federal regulation. In fact, the bill itself specifies that “the transmission in interstate or foreign commerce of any bet or wager’ includes any transmission over the Internet carried interstate or in foreign commerce, incidentally or otherwise.”
RAWA sets a dangerous precedent. Do we really want federal lawmakers from Utah determining what kinds of online activity should be lawful for the whole nation?
Check out Part 1 by CEI's Jessica Melugin: What Will a Chaffetz Speakership Mean for Internet Freedom?