• CEI Wire Act Study Complicates Gambling Ban Proponents’ Lame Duck Ploy

    Historically, lame duck sessions of Congress often become the legislative versions of the Wild West where anything goes with Leadership cutting deals behind closed doors. As Congress prepares a three-week session after the November elections, observers are on the lookout for back room deals that benefit political cronies. One issue certainly on the radar is the effort by billionaire Las Vegas casino owner and Republican mega-donor Sheldon Adelson to ban states from legalizing online gaming. However, a new study written by conservative scholar Michelle Minton of the Competitive Enterprise Institute could make the issue more politically challenging for Republicans.

    The bill’s authors, Rep. Jason Chaffetz (R-UT) and Sen. Lindsey Graham (R-SC) have asserted that the 2011 DOJ decision that green-lighted states to legalize online gaming an “overreach of the Obama DOJ” that is incompatible with the intended meaning of the original 1961 Wire Act. This line of attack is intended as a misdirect ploy to offer political cover for Republicans to vote for their legislation creating a new federal authority and usurping states’ rights. Minton’s study strips Chaffetz and Graham of this fig leaf and leaves them exposed to the facts.

    Minton notes that the 1961 Wire Act was introduced at the prodding of then U.S. Attorney General Robert F. Kennedy who wanted to get the “bankrollers and kingpins” who were betting on sports and horse-racing through the country’s telecommunications system. The study presents extensive historical evidence that the Act was always understood by all parties to apply exclusively to sports betting.

    Minton also points out that Congress’ numerous attempts to expand the Wire Act beyond sports bets in 1995, 1996, 1997, 1999 and 2002 represents a clear acceptance of the bill’s narrow jurisdiction. If the 1960’s version of the law already covered casino games, there would have been no need for these bills.

    Robbed of their one crucial sustaining argument, proponents of the federal ban are left with few remaining options to justify their federal power grab. For his part, Chaffetz has attempted to argue that states need federal permission to regulate online gaming. Apparently he has traded his membership in the Tenth Amendment Caucus in favor of a more Hamiltonian approach to the Constitution. The states no more need federal blessings to regulate Internet gaming than they do for regulating brick and mortar casinos or their lotteries.

    So far, Rep. Bob Goodlatte Chairman of the House Judiciary Committee has landed on the side of states’ rights and refused to allow a hearing on Adelson’s legislation. This has blocked the bills from advancing in regular order. But in a Lame Duck Goodlatte’s position may not matter.

    Despite the new technology at its center, the true motive for this legislation is old-fashioned cronyism. Adelson fears the competition from Internet gaming will hurt his bottom line. Chaffetz and Graham being politicians are more than happy to oblige a man who has donated over $100 million to Republican causes and continues to write fat checks to the GOP. Place those factors into a no holds barred Lame Duck session and the fate of Adelson’s legislation won’t rest on logic, facts or truth. Still, the politicians will have to justify it somehow. Thanks to Minton’s work, they’ll have one less sophism to hide behind.

    Roberto Escoban

    Roberto Escoban is the pen name of a conservative activist who spent 20 years working in Washington including a decade on Capitol Hill.

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