The 10th amendment is back in style, apparently.
Back in 2011, the Justice Department issued a legal opinion on the Federal Wire Act of 1961, essentially reversing its longstanding ban on internet gambling. “Interstate transmissions of wire communications that do not relate to a 'sporting event or contest' fall outside the reach of the Wire Act,” it read. Predictably, this ruffled a few feathers — and gave the morality police a heart attack — but the loudest opposition actually came from the heart of the gambling industry — Las Vegas.
The Justice Department’s legal ruling left it up to the states to decide the fate of online gambling, and three states — Nevada, New Jersey, and Delaware — jumped aboard. A triumph for federalism, right?
But the casino industry is far from unified on the issue. The Coalition to Stop Internet Gambling — which enjoys the support of Sheldon Adelson, CEO of Las Vegas Sands Corp. — has launched a six-figure fear-mongering campaign warning of online gambling’s potential misuse as a money laundering tool for criminals and terrorists.
They quote an FBI memo from 2009 which notes that “online poker could be used to transfer ill-gotten gains from one person to another,” via collusion and similar tactics as real-life cheaters. A video ad ominously warns that “disreputable gaming interests are lobbying hard to spread internet gambling throughout the country.” The ad uses every cheap trick in the book to warn against this looming catastrophe — online gambling will “target” families, kids, and the elderly (naturally), and it will be available 24/7 like, I dunno, a casino....
The Coalition brushes aside any talk of regulation, age verification, or the idea that online gambling vendors could effectively police themselves.
“While the vendors may claim that they can validate age and location, they are more than likely relying on credit card information and geolocation to gather this information. Both can be spoofed,” notes the FBI report.
The FBI — as a public “industry” — may have genuine security concerns, but I somehow doubt the sincerity of belligerents like Mr. Adelson. Let’s face it — this is a textbook case of crony capitalism and lobbying the federal government to legislate one’s competition out of business.
Online gambling proponents — including but not limited to MGM Resorts and Caesars Entertainment Group — may be operating out of self-interest, but at least they’re not being duplicitous about it. The Coalition for Consumer and Online Protection doesn’t pretend to serve a greater ideal than profit (and consumer freedom).
"The coalition will operate exclusively at the federal level — encouraging Congress to embrace regulation as the best means to protect minors, detect money launderers and eliminate a dangerous black market," American Gaming Association President Geoff Freeman said in an email to his board last week.
Should the federal government ignore the 10th Amendment and restore the blanket ban on online gambling? (thereby sending more business to the brick-and-mortar casinos) Should we allow crony capitalism to rule one of the last bastions of states’ rights – Las Vegas?
The Coalition to Stop Internet Gambling also has a bit of a Luddite vibe to it. “More than 330,000 Americans work in the casino industry,” the group says — the implication being that new technologies and business models will displace workers (a very old argument). Because why allow innovation to thrive?
I will never support a movement that opposes new technologies and uses federal power to thwart competition. Let consumers choose how they want to gamble.