Congress Stacks The Deck Against Online Gambling

SHUT IT DOWN: Several states have laws on
 the books to legalize and regulate online
gaming, Appropriations Report could allow
the feds to steamroll those state laws.

by Eric Boehm | Watchdog.org: Despite the promises made in the Ninth and Tenth Amendments of the u.S. Constitution, members of Congress just can’t seem to keep their hands to themselves.

A new effort on the table from the federal legislature would override state-level laws regarding online gambling, at the behest of a major GOP donor.

Several states have laws on the books to legalize and regulate online gaming, but language quietly slipped into a Senate Appropriations Report could allow the feds to steamroll those state laws. The amendment, introduced by U.S. Sen. Lindsey Graham, R-South Carolina, would effectively ban all online gambling, both interstate and intrastate.

Some Republicans in Congress — egged on by Sheldon Adelson, a Las Vegas casino magnate and major GOP donor — have been trying to pass an online gambling ban for several years.

Adelson’s interest in such a proposal is fairly obvious: fewer online gaming options means more people have to trek to his casinos to get their gaming rush. And in Nevada, where online poker is legal, Caesars Entertainment dominates the industry, while Adelson’s Las Vegas Sands casinos don’t offer an online poker site.

He can’t get Congress to approve an online gambling ban through traditional channels, so Adelson has been pressuring his close friends — like Graham — to sneak the language into unrelated bills.

The language inserted into the Senate Appropriations Report comes from the so-called Restoration of America’s Wire Act, which was written by lobbyists for Las Vegas Sands last year.

The Wire Act, as interpreted by federal courts in a landmark 2011 decision, only regulates sports betting but allows states to police themselves when it comes to other forms of internet-based gambling.

As Michelle Minton of the Competitive Enterprise Institute points out, this sort of thing is just a bad idea.

“In addition to having dangerous implications for other kinds of online commerce, an online gambling ban will do nothing to protect consumers (as proponents like to claim it will), and instead only push them toward the black market,” wrote Minton. “Worst of all, it strips adult citizens of the right to decide when and how we spend our own money.

This isn’t the first time Congress has tried to sneak gambling regulations into unrelated pieces of legislation.

In 2006, the Unlawful Internet Gambling Enforcement Act was tacked onto the SAFE Port Act, a largely unrelated anti-terrorism bill focused on port security.

The UIGEA prevented gambling businesses from knowingly accepting payments in connection with people making internet wagers that are prohibited under state or federal law. That act specifically excludes fantasy sports that meet certain requirements, which led to the growth of daily fantasy sports sites as it imploded the poker boom.

This time around, the gambling ban inserted into the Appropriations Report is a single paragraph within a 141-page bill.

Whether it’s regulating online poker — as the UIGEA did — or banning all online gambling, Congress should not be sneaking unrelated and unpopular regulations into other pieces of legislation.

And it should go without saying, but Whether it’s regulating online poker — as the UIGEA did — or banning all online gambling, Congress should not be sneaking unrelated and unpopular regulations into other pieces of legislation.

And it should go without saying, but Congress should keep its hands out of the online gambling business entirely. States have been given the authority to regulate the industry — and they have done so, without problems — and adult Americans should be free to spend their money as they see fit, even if Las Vegas billionaires disagree.
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Eric Boehm is a reporter for Watchdog.org. Follow him on Twitter at @EricBoehm87.

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