Respected online gambling legal authority, university professor I.
Nelson Rose published an interesting article this week, starting with
the provocative view that the United States Congress has lost sight
of a fundamental fact about gambling: It is up to the states, not
the federal government, to decide what forms of gambling should be
legal.
Claiming that the individual states that make up the U.S.A. have always
made public policy when it comes to both legal and illegal gambling,
Professor Rose says that the states are free and are even encouraged
to try social experiments.
That being the case, the professor opines, if New Jersey wants to
legalize casinos to revive a dying resort, it can do so. If it works,
other states can follow. Conversely, states like Utah are free to
keep all forms of gambling illegal, if they wish. Gambling is an activity
that has always come under the states' police power, which is the
right and obligation of the states to protect the health, safety,
welfare and morality of their residents.
In the article, Professor Rose says that the idea that the federal
government can tell a state what its public policy toward gambling
must be violates the very concept of the union of states. That being
the case, he asks why Congress is considering bills to outlaw all
forms of Internet gambling? Even with these bills, Congress recognize
that states have the right to operate remote wagering on horse races
and state lotteries (the notorious 'carve outs').
So, why are casino games, bingo and poker not also being left up
to the states?
Attacking the irrationality of the pending legislation, the professor
points to its treatment of horseracing versus dogracing. Interstate
betting on horse races would remain legal, but the exact same wagers
would not be allowed on dog races.
Professor Rose says that the solution to the problem of Internet gambling
already exists. In December 2000, Congress amended the Interstate
Horseracing Act to expressly allow patrons to bet from their homes
and offices by phone or computer, so long as the state where the bettor
is and the state where the bet is accepted have made such gambling
legal.
(As a side note, the U.S. Department of Justice has taken the position
that all cross-border betting is illegal, even on horse races. Besides
being a great surprise to the horseracing industry, which would not
survive without off-track and inter-track betting, the position is
just plain silly - why would Congress pass an Interstate Horseracing
Act, if it wanted to outlaw interstate horseracing?)
There is no reason why the states should have the power to decide
whether bettors can bet by phone or computer on horse races but not
have the same power to make public policy on games like poker, Professor
Rose comments. Why should the federal government care if states with
legal poker, like Nevada, New Jersey and California want to allow
their licensed poker rooms to operate online, and take bets from each
other. As with horseracing, no one is forcing Utah to change its policy
of complete prohibition.
Professor Rose also considered the World Trade Organization dispute
(see earlier InfoPowa bulletins) in his article, saying that by allowing
the states to decide whether they will license operators and permit
their residents to play poker online would also solve this problem.
The World Trade Organization found the U.S. was discriminating against
Antigua, because the U.S. only allows state-licensed books to accept
bets on horse races. Antigua and every other foreign nation and state
should be allowed to make the same decision about online gambling
as the U.S. states.
But only licensed operators, who meet the same standards as American
poker rooms, would be allowed to take bets from the U.S. And these
foreign states would have to allow their residents to bet with U.S.
online operators.
Professor Rose concludes by opining that it is always dangerous to
predict that Congress will act rationally. But, he says with absolutely
accuracy: "....somebody is going to point out that if the
states are competent to make up their own minds on horseracing, they
are competent to do the same with dogracing, bingo, casinos and poker."