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Online Gambling -- None Of Washington's Business (But Its Enemies Don't Care)

Citations

Forbes cited Michelle Minton on the history of Pennsylvania Representative Charlie Dent and others to pass an amendment illegalizing state-based internet gambling within the state of Pensylvania. 

One of the things that gives capitalism a bad name is the way those who’ve been successful in it sometimes turn to the government to keep out competition that could reduce their profits or even put them out of business. It’s deplorable when people who have used their entrepreneurial talents to create goods and services that consumers want later turn to the nasty game of politics to keep others from trying.

There are numerous examples of that but in this piece I’ll focus on the gambling industry. Casinos have made some men very rich and one of the best known is Sheldon Adelson, a billionaire who likes to dabble in politics. (In 2012, he was the big money behind Newt Gingrich’s campaign, as we read here.) He knows that online gambling reduces the traffic into his casinos and is doing all he can to stop its growth.

Under our Constitution, what if any laws pertaining to gambling should be enacted is a matter for the states. The Tenth Amendment reads, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” If you go through the powers that are delegated to the United States (which is to say, the federal government’s sole law-making branch, Congress), you do not find gambling among them.

Nevertheless, Adelson wants to use federal law to block internet gambling. To that end, he’s supporting a bill entitled the Restoration of America’s Wire Act (RAWA).

The Interstate Wire Act was passed in 1961, part of the war between Attorney General Bobby Kennedy and organized crime. The law made it a crime punishable by up to two years in prison for anyone to “use a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers on any sporting event or contest….”

What the forces opposed to online gambling want is to change the law so that it will encompass not just sports betting, but all sorts of gambling. In 2011, the Department of Justice issued a memo in response to inquiries from New York and Illinois as to the scope of the law, saying that it only applied to sports and not to lotteries or other types of gambling. The states were therefore free to use the Internet to sell lottery tickets to adults within their own borders.

That ruling, as Edward Wyatt wrote for the New York Times, “opened the door for the states to allow Internet poker and other forms of online betting that do not involve sports.”

It is that obvious (we might say Originalist) interpretation of the Wire Act that the opponents of online gambling want to reverse with RAWA. The states would then be prohibited from legalizing online gambling if they choose – again, a matter that the Constitution leaves to them.

Of course, Adelson and his allies know that most bills do not pass, so they aren’t putting all their money on RAWA. They have other cards up their sleeves.

Michelle Minton of the Competitive Enterprise Institute informs us here that Pennsylvania Representative Charlie Dent, a Republican, plans to attach an amendment to the current budget bill that would prohibit online gambling. She writes, “While details about Dent’s plan are scant, the tactic sounds like a repeat of the scheme he and other members of Congress cooked up in 2016. For years, prohibitionists have fought and failed to enact a ban on state-based Internet gambling through the normal legislative process.”

Read the entire article at Forbes.