Despite a 2002 ruling by the Fifth Circuit Court of Appeals to the contrary, the Department of Justice has long held that the Wire Act prevents all online gaming in America. In 2011, after nine years of recalcitrance, the DOJ finally issued a revised interpretation that has paved the way for states like Nevada, Delaware and New Jersey to legalize online gaming in their states and spawned a new battle over states’ rights.
Casino mogul Sheldon Adelson views the state operations as competition to his Las Vegas casinos and has launched a high profile effort to protect his billions at the expense of states' rights. Adelson is pushing for passage of federal legislation to overturn the right of states to legalize online gaming within their own borders.
(AP Photo/Eric Jamison)
Alarmingly, Adelson’s effort has found some takers. Oddly, the buy-in doesn't come from the party of big government, Democrats. Moderate Republican Sen. Lindsey Graham of South Carolina has introduced the Senate version of Adelson’s ban with the support of Sens. Mike Lee (R-Utah), Kelly Ayotte (R-N.H.) and Dianne Feinstein (D-Cali.). Rep Jason Chaffetz (R-Utah) has introduced the House version which has drawn the support of some key Judiciary committee members.
Republican proponents of the ban have been quite slippery in their attempts to justify their support for such an egregious usurpation of states’ rights. They claim that the legislation is intended to merely correct an Obama Department of Justice overreach. Others have misleadingly claimed that states exercising their rights to regulate online gaming in their states - just as they do brick and mortar sites - somehow equates to widespread, unfettered, unregulated gambling.
Mr. Chaffetz even went so far as to make the unfounded and very un-federalist assertion that states wanting to legalize online gaming must first come to Congress for permission.
Las Vegas Sands Chairman and CEO Sheldon Adelson. Credit: AP
Conservative and Tea Party organizations aren’t buying it. A coalition of leading organizations has sent a letter to Congress opposing the Adelson legislation calling it “a broad overreach over matters traditionally reserved to the states.” They go on to point out that the legislation allows the federal government to “take a heavy hand in regulation of the Internet, opening the door for increased Internet regulation in the future. By banning a select form of Internet commerce, the federal government is setting a troubling precedent and providing fodder to those who would like to see increased Internet regulation in the future.”
The Internet isn’t the only area that would be affected. There is no shortage of issues on which politicians and leftist billionaires would like to see the federal government trump states. One can only imagine that Michael Bloomberg is salivating at the possibility of such power to advance his agenda for gun control and the food police.
The inescapable fact of this issue is that the regulation of gaming contained in the states is not a federally enumerated power in the constitution. Sen. Graham points out that South Carolina recently banned video poker and Rep. Chaffetz proudly proclaims that Utah outlaws all forms of gambling.
Good for them! These states’ power to do so is derived from the same Tenth Amendment that the Adelson legislation would undermine.
Republicans in Congress should heed the words of these conservative organizations and not be fooled by misleading rhetoric and crony agendas. States exercising their Tenth Amendment right do not always align with our personal point of view but that is exactly how the Founding Fathers envisioned our Republic would work.
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