By Martin Owens
But It's All Right When WE Do It:
The Constitution, Coercion And Online Gambling
"A good deal of tyranny goes by the name of protection."
Much criticism has been leveled against the Obama administration recently, in particular regarding a tendency to unilateral action without consulting Congress. The Republicans of the legislative branch, and even some of its Democrats, protest that the executive branch's sole responsibility is to ensure that the laws are carried out. Not to refuse those laws which it disapproves of, nor to add to those laws which it thinks are inadequate, and especially not to make law where none exists, to raise one set of political opinions over another by sheer administrative power. Such irresponsible shenanigans, they say, subvert the intent of the Constitution and the Founding Fathers, undermining the rule of law upon which America's brand of civilization depends.
And then there is Internet gambling
Jindal's Appeal to Authority
It was a strange spectacle to see Louisiana's Governor Bobby Jindal, otherwise a staunch proponent of limited government, solemnly arguing for a nationwide ban on Internet gambling by administrative, not statutory means.
In a guest column published in the Greater Baton Rouge Business Report, the Honorable Governor reiterated the old and mostly threadbare argument that the introduction of Internet gambling would serve to impoverish the weak and vulnerable among us, much more so than gambling confined to particular resort hotels in particular districts, under the particular supervision and taxation power of state authorities.
There are many ironic aspects to such a stance, not least of which is that Louisiana is one of only nine of the Fifty States which even addresses the Internet in relation to gambling. Moreover, Louisiana lawmakers may justly be proud of the job they did. Their Internet gambling statute, set forth at Chapter 14, section 90.3, of the Revised Statutes, meticulously defines what the Internet actually is, for these purposes, along with computer networks, systems, services, software and even web pages. Unauthorized computer gambling is a misdemeanor, which might draw six months and/or a $500 fine (supposing they can catch you at it). Those operating such an enterprise can draw five years, provided Louisiana law enforcement gets hold of them. So at first glance it would seem that Louisiana has nothing to worry about. No one is authorized to offer Internet gambling to residents of the Pelican State without proper licensing and approval.
Wrong Technique and Wrong Move
Why, then, is Louisiana's chief executive in such a froth about the approval of Internet gambling in distant Nevada, New Jersey, and Delaware? Probably because Gov. Jindal is fading back in the prospective field of presidential candidates for 2016. And for a politician in difficulty, denouncing the strawman of Wicked Gambling is always good political theater. With this proviso, of course: one must not denounce the state approved and state licensing gambling that is already in place. That means taxes and jobs, and a candidate for office has to be out of his mind to attack those.
But seriously, if the powers-that-be are so gravely concerned about confiding, vulnerable citizens being exploited by ruthless manipulation, where were they when the dot-com stocks turned into dot bombs, when America's prime financial houses were turning worthless mortgages into packaged financial instruments and retailing them across the globe? The US housing market bubble was the direct cause of the worldwide financial meltdown that has inflicted, first and last, $39 trillion- that's "trillion" with a "T", boys and girls- $39 trillion in losses upon the global economy. We may not recover from that in my son's lifetime, never mind mine.
By comparison, there are only about two thousand Internet gambling web pages online at any given time. Is any sober, sane person prepared to allege that each and every one of these two thousand operations committed just south of $2 billion in deliberate fraud? For that is the only possible way that Internet gambling could even begin to match the social and economic threat posed by out-of-control real estate and stock markets. And let's face it: someone ruined by gambling debts can declare bankruptcy (in Louisiana and a number of other states, gambling debts may not be applied against legally recognized liens, mortgages, or security interests). A great many people throughout the USA, caught in sabertooth mortgages, wish they enjoyed the same exemptions!
But the most daunting and discouraging thing about Gov. Jindal's disquisition is that it demands a return to, and reinforcement of, the same top-down tyranny that the Republican Party supposedly denounces in other areas. Here, indeed, is where the mask slips. For all during the presidency of George W. Bush, the Bush Department of Justice took the position that the Wire Wager Act (18 USC 1084) forbade not only online gaming involving sports betting, but online gambling of each and every sort. There was, and is, no support in the actual language of the statute for that position. Nor was there any comfort in the case law. This was concentrated in the case of "In re MasterCard" from the Fifth Federal District (Louisiana) where two separate sets of judges went out of their way to specify that the Wire Wager Act involves sports betting and nothing else. There was even the practical reality of licensed online horse betting, whereby the states license various Internet services to help with their pari-mutuel wagering
And what was the reaction of the DOJ, as constituted at that time? They simply went ahead, law or no law, court opinions or no, and instituted a comprehensive campaign of suppression against online gambling and its operators, anywhere they could be reached. Executives of Internet gambling operations, and even the payment solution companies which handled their business were picked up in airports, ambushed at their vacation homes, and just plain run out of the country.
Finally, in late 2012, the Obama Department of Justice admitted what everyone familiar with gambling law in the USA had already known for years: that the Wire Wager Act covered sports bets, and sports bets alone. This may be a temporary break for the Internet gambling industry, but for anyone who seriously believes in the promises of the U.S. Constitution, the prospects are bleak indeed.
Choosing the Lesser Evil
For the problem with law that comes from bureaucratic decisions rather than legislation is this: it can be changed at any time. For good reasons, for bad reasons, for any reason, for no reason at all. The fundamental problem with Internet gambling in the United States is that we have nothing like a national policy. There is no Federal law spelling out what can and cannot be done. There is not even a consensus among the states on what should be allowed, and when, and how.
This makes it practically impossible for an online gaming business to make any sort of plan. Not only are they saddled with the burden of sorting out what gambling policy is, state-by-state, but they will have hanging over them the threat that the Feds could declare them all criminals next week. Or just some of them. Maybe the ones that allow bets on football and baseball are taboo, but horse racing gets to stay (horse racing always gets to stay, at least so far). Table games? Poker?
The prospect of such a future is so bad, that it makes a bad thing look good. Namely, US Sen. Heller's idea for a new law to ban Internet gambling in the USA, apart from online poker (and, presumably, horse racing). While the usual shibboleths of protecting the young and vulnerable are of course thrown out, as cover, the real intention of such a law is to protect the existing interests, Nevada's brick and mortar operations in very particular. It is hardly surprising that a Senator from Nevada should propose such a measure, or that his erstwhile political foe, the vinegary Harry Reid, should concur. Their efforts coincide with those of gambling billionaire Sheldon Adelson, who likewise has very significant interests to protect, not only in Nevada but globally.
Such a law would be essentially unjust. It would be unconstitutional as well, by placing arbitrary and selective burdens on interstate commerce. However much politicians may profess to hate gambling, they cannot deny that gambling transactions are articles of interstate commerce. This was established as long ago as 1903, in a Supreme Court decision. Then too, such a law would probably be an intrusion into the established powers of state governments not permitted by the Constitution. Just in case anyone was paying attention to the Constitution anymore.
But at least it would be a law, not the arbitrary call of some bureaucrat accountable to no one. All law, even a bad law, can be amended or repealed. But when we are ruled by decree, we play with 52 jokers in the deck: anything goes, any time the dealer needs it, changeable whenever, and for whomever, the dealer feels like.