Following attorney general nominee Jeff Sessions’ insistence Wednesday during his confirmation hearing that he was “shocked” at the Obama administration’s stance that the 1961 Interstate Wire Act doesn’t apply to online gambling, a coalition of free market groups is urging Sessions and Vice President-elect Mike Pence to reject calls for a ban.
The coalition argues a de facto prohibition on internet gambling was clearly not the intent of Congress in 1961, noting the Wire Act references wagers specifically on sporting events. (The letter does not note that in 1961 the internet was still decades away from existence.)
“Regulatory intervention now from the U.S. Department of Justice would represent a true violation of the legislative process,” the letter says. “Today, it’s online gambling, but in the future it might be gun and ammunition sales targeted by Congress or an over-zealous executive branch.”
The letter’s co-signers include Competitive Enterprise Institute, Institute for Liberty, Campaign for Liberty, Taxpayers Protection Alliance, Center for Freedom and Prosperity, Digital Liberty, Institute for Policy Innovation and the Rio Grande Foundation.
Ten Republican attorneys general sent a letter to Pence in November asking for a reinterpretation of the Wire Act to include a federal ban on online gambling. Since the Justice Department said in 2011 the Wire Act doesn’t apply to most forms of online gambling, a handful of states have begun offering intrastate poker, lottery tickets and various casino games online. That includes Nevada, whose attorney general, Adam Paul Laxalt, co-signed the letter, earning him the ire of many top elected officials in the Silver State.
The attorneys general argued that the DOJ bypassed Congress in its “reinterpretation” of the Wire Act, but the free-market coalition points to at least five bills to amend the Wire Act and make it applicable to all online gambling that Congress considered and rejected prior to 2011.
More recently, the bill titled Restoration of America’s Wire Act and similar legislation have been brought up, but no prohibition efforts have gained traction in Congress. Speculation that a RAWA-like bill would be rammed through in the lame-duck session didn’t come to fruition.
During the hearing on Wednesday, Sessions said in response to a query from prohibition advocate Sen. Lindsay Graham, R-S.C., “I did oppose [the DOJ memo] when it happened, and it seemed to me to be unusual. I would revisit it or make a decision about it based on careful study. I haven’t gone that far to give you an opinion today.”
The coalition points out that while prohibition is backed by some Republicans, more oppose it because it raises concerns about violating the Tenth Amendment, which delegates powers to the states not specifically given to the federal government in the U.S. Constitution.
The letter says a ban would undermine the ability of states to regulate intrastate commerce and set a “dangerous anti-federalism precedent.” It notes that New Jersey collected almost $30 million from regulated online gambling in 2016.
Prohibition would also eliminate consumer protections put in place by the states that have regulated the games, the coalition says, and force many players into the black market.
The burgeoning online poker market was always played in such shadows and the Unlawful Internet Gambling Enforcement Act of 2006 only exacerbated the issue, resulting in many sites pulling out of the U.S. market without paying players. Many professional online poker players moved to Canada, Mexico and several Caribbean countries where they could still legally play the games.
“Neither consumers nor state governments would benefit from a federal online gambling ban,” the letter states. “The only people who would profit are those who compete with legal online gambling: illegal gambling sites and the few brick-and-mortar casinos that are uninterested in expanding into the online market.”