Let States Regulate Internet Gambling

This country has many serious problems to address, but an activity that millions of people around the world voluntarily enjoy, mostly without incident, is not one of them and it certainly does not warrant a big new federal regulatory agency.

In a recent op-ed in The Washington Examiner, former Pennsylvania governor and Homeland Security chief Tom Ridge and former FBI Director Louis Freeh called for immediate federal regulation of Internet gambling.

Ridge and Freeh, who are employed by Fair Play USA a lobbying group funded by the largest Las Vegas casinos, argue that federal rules are necessary for law enforcement to be able to tackle interstate crime and to keep minors from accessing online games. This is far from the truth.

Ridge and Freeh assert that additional federal regulations are needed to shore up enforcement. The truth is that there are currently zero federal laws banning Americans from non-sports gambling online.

This was made clear when Assistant Attorney General Virginia A. Seitz announced that in the Department’s opinion the 1961 Wire Act applied only to sports wagering.

Many countries around the world have had legalized online gambling for decades. In the United States, prior to the 2006 Unlawful Internet Gambling Enforcement Act that raised the question of a federal stance on the legality of online gambling, millions of Americans also wagered online; only a handful of incidents occurred prior to 2006 and droves of people were not losing their homes and sanity to online gambling.

Adults ought to be able to choose whether or not they wish to engage in risky behaviors, so long as they are the only person taking on the risk. After all, plenty of people (including members of government) invest in the stock market, which is essentially gambling. The proper role for the government in the Internet gambling arena is to protect Americans from fraud, theft and other violations of their rights.

To that end, state governments are fully equipped to enforce minimum age limits and assertions of fraud. As Freeh and Ridge noted in their article, state-of-the-art technologies already exist to restrict minors, protect against fraud and secure data.

Private certification companies require online gambling sites to submit to mediation if a player asserts that he or she has been cheated. Individual States can experiment with different schemes for licensing and regulating to tweak their policy until they find the best outcome for residents, businesses and state budgets.

A federal monopoly regulatory agency would be less flexible and more likely to bow to the pressure of special interests.

New federal laws are not necessary. As proven by “Black Friday,” the Department of Justice’s shutdown of online gambling websites, law enforcement already has the necessary tools to track and prosecute illegal online gambling activity that crosses state lines.

Furthermore, federal and state tax codes are already in place for players and platforms to report earnings. The courts should answer questions of fraud and cheating.

Federal regulators should leave states and citizens to make their own choices about gambling and get back to addressing the many more pressing problems this nation faces.