Category: Daniel MacLane

Should the GOP Ban Online Gambling?


Representative Jason Chaffetz (R-UT) and Senator Lindsey Graham (R-SC) have relaunched a misguided push to battle gambling addiction through their bill, The Restoration of America’s Wire Act (RAWA). This bill would essentially assault the Tenth Amendment by expanding the powers of the Federal Wire Act of 1961 to outlaw all Internet gambling except for daily fantasy sports and online horse race wagering.

RAWA is disastrous in a multitude of ways. Primarily, it would be devastating economically to states that already have legalized and expanded online gambling such as New Jersey, Delaware, and Nevada. New Jersey in particular has experienced significant growth in online gambling, which has created jobs and helped revive the profits of many casinos in Atlantic City.

Outlawing online gambling would greatly cut into the tax revenues of these states. In 2014, New Jersey, Delaware, and Nevada collected about $20 million in total of direct tax revenue from online gambling operators. This is just direct tax revenue and does not factor in the indirect funds that stem from economic growth and job creation.

For online gambling to work, other sectors of the economy must also be developed. Other businesses will provide services to these online gambling companies, further expanding the economy. Outlawing online gambling will also impede industries that provide payment processing, verify identification and — most obviously — marketing industries that promote the gambling industries. This prohibition would catalyze job losses in multiple segments of the economy.

RAWA undermines the small government philosophy of conservatism, as instituting this ban would force the government to establish more expansive bureaucracies that would be extremely costly and unaccountable to the American people. Federalism is also rent asunder under RAWA since the federal government would be undermining states’ rights through the manipulation of the commerce clause of the Constitution.

Conservatives are not fond of this “Republican” bill either. An eye-opening survey conducted at the Conservative Political Action Conference (CPAC) this year found that 90% of conservatives do not support federal government efforts in annulling state internet gambling laws. At the same time, 88% of respondents claimed that RAWA was a form of crony capitalism. RAWA has also been opposed by a multitude of conservative organizations, including the Institute of Liberty, the Competitive Enterprise Institute, and the American Conservative Union.

It is no surprise that the main backer of this bill is Republican superdonor Sheldon Adelson. Adelson is adamantly against online gambling and funds a group called the Coalition to Stop Internet Gambling (CSIG). This group seeks to change the American public’s perception of online gambling by pushing fabrications and erroneousness statements.

Adelson portrays himself as someone who is morally opposed to online gambling, but it is no coincidence that he is the chairman and CEO of Las Vegas Sands Corp. Outlawing online gambling would dissipate a major competitor of the casinos run by Adelson, clearly exposing the cronyism of RAWA. This is especially evident in the fact that daily fantasy sports are exempted, since this form of online gambling does not compete directly with Adelson’s casinos. Daily fantasy sports can be just as addictive as regular online gambling – further revealing the cronyism being purported by this bill as opposed to the battle against gambling addiction its supporters claim to be pursuing.

It is also no coincidence that Representative Chaffetz and Senator Graham are the ones sponsoring RAWA. Senator Graham received over $20,000 in campaign contributions in the past election cycle from Adelson, members of Adelson’s family, and the Las Vegas Sands Political Action Committee. Their respective states also would not feel the economic burden from outlawing of online gambling as Utah and South Carolina made it illegal.

Although the legislative push to ban online gambling seems to have bipartisan opposition and no path forward, there is still the chance of newly appointed Attorney General Jeff Sessions unilaterally banning it through the manipulation of the Federal Wire Act of 1961. During his confirmation hearings, then-senator Sessions said that he was willing to review a 2011 decision made by the Department of Justice that affirmed the 1961 Act to outlaw only sports betting.

Sessions reneging on the 2011 decision would be an overreach of the executive branch powers and will undermine the federalist principles that are critical to American government. The meaning of the law is debated since some of the language is ambiguous, such as the below:

Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.

The debate contends that only transmitting information related to sports gambling is illegal and the act outlaws all gambling through a wire communication. However, as Michelle Minton of University of Nevada, Las Vegas writes, the Federal Wire Act of 1961 was intended to hurt the income of organized crime in America. The mob’s income at the time rested mostly on sports-related gambling, which led Robert F. Kennedy, the U.S. attorney general at the time, to push for the outlawing of sports gambling through wire communication. Kennedy, in his testimony before Congress, made it clear that his intentions were to outlaw sports gambling and not gambling in general. There is also another clause in the law that exempts sports outlets from being prosecuted for transmitting information through a wire. If the act were intended for all gambling, why would only sports outlets receive exemptions?

Attorney General Sessions has done a great job so far reinstituting the rule of law in America, but unilaterally outlawing gambling would be a huge mistake.

Gambling in moderation can be a fun activity, but there is the potential for escalation towards addiction which can be life destroying. Prohibiting it altogether, however, is not a viable solution. There is no constitutional justification for it, it is economically devastating, and undermines American principles of federalism. If the Republican Party truly wants to champion conservative values, it must refrain from being influenced by special interests and superdonors who do not espouse conservative ideology. Otherwise, just as Rush Limbaugh posited to Vice President Mike Pence on his radio show recently, why should we continue to vote Republican at all?

Daniel Maclane is a conservative activist and columnist for the Lone Conservative and the Daily Targum

Representative Jason Chaffetz (R-UT) and Senator Lindsey Graham (R-SC) have relaunched a misguided push to battle gambling addiction through their bill, The Restoration of America’s Wire Act (RAWA). This bill would essentially assault the Tenth Amendment by expanding the powers of the Federal Wire Act of 1961 to outlaw all Internet gambling except for daily fantasy sports and online horse race wagering.

RAWA is disastrous in a multitude of ways. Primarily, it would be devastating economically to states that already have legalized and expanded online gambling such as New Jersey, Delaware, and Nevada. New Jersey in particular has experienced significant growth in online gambling, which has created jobs and helped revive the profits of many casinos in Atlantic City.

Outlawing online gambling would greatly cut into the tax revenues of these states. In 2014, New Jersey, Delaware, and Nevada collected about $20 million in total of direct tax revenue from online gambling operators. This is just direct tax revenue and does not factor in the indirect funds that stem from economic growth and job creation.

For online gambling to work, other sectors of the economy must also be developed. Other businesses will provide services to these online gambling companies, further expanding the economy. Outlawing online gambling will also impede industries that provide payment processing, verify identification and — most obviously — marketing industries that promote the gambling industries. This prohibition would catalyze job losses in multiple segments of the economy.

RAWA undermines the small government philosophy of conservatism, as instituting this ban would force the government to establish more expansive bureaucracies that would be extremely costly and unaccountable to the American people. Federalism is also rent asunder under RAWA since the federal government would be undermining states’ rights through the manipulation of the commerce clause of the Constitution.

Conservatives are not fond of this “Republican” bill either. An eye-opening survey conducted at the Conservative Political Action Conference (CPAC) this year found that 90% of conservatives do not support federal government efforts in annulling state internet gambling laws. At the same time, 88% of respondents claimed that RAWA was a form of crony capitalism. RAWA has also been opposed by a multitude of conservative organizations, including the Institute of Liberty, the Competitive Enterprise Institute, and the American Conservative Union.

It is no surprise that the main backer of this bill is Republican superdonor Sheldon Adelson. Adelson is adamantly against online gambling and funds a group called the Coalition to Stop Internet Gambling (CSIG). This group seeks to change the American public’s perception of online gambling by pushing fabrications and erroneousness statements.

Adelson portrays himself as someone who is morally opposed to online gambling, but it is no coincidence that he is the chairman and CEO of Las Vegas Sands Corp. Outlawing online gambling would dissipate a major competitor of the casinos run by Adelson, clearly exposing the cronyism of RAWA. This is especially evident in the fact that daily fantasy sports are exempted, since this form of online gambling does not compete directly with Adelson’s casinos. Daily fantasy sports can be just as addictive as regular online gambling – further revealing the cronyism being purported by this bill as opposed to the battle against gambling addiction its supporters claim to be pursuing.

It is also no coincidence that Representative Chaffetz and Senator Graham are the ones sponsoring RAWA. Senator Graham received over $20,000 in campaign contributions in the past election cycle from Adelson, members of Adelson’s family, and the Las Vegas Sands Political Action Committee. Their respective states also would not feel the economic burden from outlawing of online gambling as Utah and South Carolina made it illegal.

Although the legislative push to ban online gambling seems to have bipartisan opposition and no path forward, there is still the chance of newly appointed Attorney General Jeff Sessions unilaterally banning it through the manipulation of the Federal Wire Act of 1961. During his confirmation hearings, then-senator Sessions said that he was willing to review a 2011 decision made by the Department of Justice that affirmed the 1961 Act to outlaw only sports betting.

Sessions reneging on the 2011 decision would be an overreach of the executive branch powers and will undermine the federalist principles that are critical to American government. The meaning of the law is debated since some of the language is ambiguous, such as the below:

Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.

The debate contends that only transmitting information related to sports gambling is illegal and the act outlaws all gambling through a wire communication. However, as Michelle Minton of University of Nevada, Las Vegas writes, the Federal Wire Act of 1961 was intended to hurt the income of organized crime in America. The mob’s income at the time rested mostly on sports-related gambling, which led Robert F. Kennedy, the U.S. attorney general at the time, to push for the outlawing of sports gambling through wire communication. Kennedy, in his testimony before Congress, made it clear that his intentions were to outlaw sports gambling and not gambling in general. There is also another clause in the law that exempts sports outlets from being prosecuted for transmitting information through a wire. If the act were intended for all gambling, why would only sports outlets receive exemptions?

Attorney General Sessions has done a great job so far reinstituting the rule of law in America, but unilaterally outlawing gambling would be a huge mistake.

Gambling in moderation can be a fun activity, but there is the potential for escalation towards addiction which can be life destroying. Prohibiting it altogether, however, is not a viable solution. There is no constitutional justification for it, it is economically devastating, and undermines American principles of federalism. If the Republican Party truly wants to champion conservative values, it must refrain from being influenced by special interests and superdonors who do not espouse conservative ideology. Otherwise, just as Rush Limbaugh posited to Vice President Mike Pence on his radio show recently, why should we continue to vote Republican at all?

Daniel Maclane is a conservative activist and columnist for the Lone Conservative and the Daily Targum



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