The National Governors Association sent a strong message to the Attorney General Jeff Sessions, indicating that they believe that the regulation of gambling, whether in the casino or online, is the states rights issue, not a federal one. Some in Washington are suggesting that the Justice Department use the Wire Act of 1961 as a basis for controlling Internet-based gambling. I think it’s important to understand the Wire Act. What follows is a short history:
A Short History of the Wire Act:
The Wire Act passed in 1961 as part of a Kennedy-era push against organized crime. The relevant part reads:
“Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.”
Organized crime in the past used the telegraph wire system to conduct illegal sports bets across state lines and circumvent the legal authorities. They were operating an illegal activity, which is different than using the Internet to play games. The act of Internet gaming should be a legal activity passed on by the states and should be regulated by those states.
Laws have been passed in those 47 states to fit any abusive situation for the protection of its citizens. Before the government writes new rules that in effect become law, I believe the existing laws should be reviewed as to their applicability in the modern world and if necessary rescinded. The mob was making money illegally through their activities up until the passage of the Wire Act. The underworld was not paying any income taxes on their illegal gains. Today the Wire Act is outdated and does not apply because the activities covered by the Act are no longer illegal. Casino operators today whether bricks and mortar or online are paying taxes to the states.
Let me say that the Wire Act was established to try to prevent illegal activity on the part of organized crime. It is evident to me that the states have been and continue to regulate legalized gambling for the protection of their customers to do everything to keep organized crime out of the business. Online gaming is available from all over the world to those people who have access to the Internet.
If the states had not set up casino control commissions or in the case of Nevada, New Jersey, and Delaware who are regulating online casinos, then one could make a case the federal government needs to play a role. However, with all of his oversight conducted by the states the federal government does not need to get involved in what is clearly a states rights issue.
In the early 60s, the Justice Department was very much involved with dealing with organized crime, but if you read the above highlights from the wire act one would be hard pressed to find I need for the central government to impose its will on the state governments who were already policing the gaming industry in the United States.
It seems to me that the Justice Department should be deploying its resources in protecting us from terrorists, rather than trying to figure out how to take over what the states are already effectively doing. There are clearly things the federal government can do better than the states, but for the federal government to duplicate what is already in place at the state government level seems like a waste of resources.
I understand that some people in the gaming industry believe that they will be helped if the government steps in to control portions or all of the gaming industry in the United States. I also understand that some Americans are opposed to legalizing gambling in whatever form and they are entitled to their opinion. The 10th amendment of the Constitution drafted by the founders clearly says, “The principle of Federalism says the Federal Government possesses only those powers delegated to it by the United States Constitution, all remaining powers are reserved for the states or the people.
So this issue is not whether you can pull the lever on a TV screen or in the casino; what it’s about is the reserve power of the states and or the people. The state has set up the necessary mechanisms to police the system so that residents of the states have a fair chance to win. I do not believe that when the camel gets his nose in the tent, the rest of the camel will surely follow. If the Justice Department can decide on the galaxy of online gambling in Nevada, New Jersey, and Delaware, then how long before the rest of the camel of restriction gets into the tent in the states turn over more control to the federal government?