Congress Already Decided States Should Have Right To Legalize Internet Gaming

John Mehaffey November 12, 2015 2321 Reads
legal online gambling states rights

Proponents of a proposed ban on online gambling are ignoring the UIGEA when it comes to the federal government and its position on allowing iGaming on the state level.

The argument of RAWA supporters

The U.S. Justice Department released an opinion in 2011 that acknowledged that states have the right to legalize and regulate gambling over the Internet. The memo notes that the Wire Act only applies to interstate sports betting.

Supporters of the Restoration of America’s Wire Act (RAWA) — including the Coalition to Stop Internet Gambling (CSIG) and the bill’s sponsors — often assert that this memo was an inappropriate bypass of the legislative process.

CSIG claims that Congress should be involved in the debate as to whether online gaming is a state’s right. According to CSIG, the U.S. Justice Department acted without guidance from Congress when drawing its legal opinion.

CSIG states on its website at Stopinternetgambling.com:

On December 23, 2011, the Justice Department – with no public input or Congressional involvement – issued a legal opinion reversing its long-held position that the Wire Act bars Internet gambling, opening the door for states to authorize non-sports wagering over the Internet.

Rep. Jason Chaffetz (R-Utah) is the main sponsor of RAWA in the House. Chaffetz made this claim when he introduced RAWA to Congress:

In yet another example of executive branch overreach, the DOJ crossed the line by making what amounts to a massive policy change without debate or input from the people or their representatives.

The UIGEA disagrees with them, however

These statements are not accurate. The Congressional intent is clear under the Unlawful Internet Gambling Enforcement Act (UIGEA). Language in the UIGEA specifically gives states the right to legalize and regulate online gambling:

(B) Intrastate transactions.— The term “unlawful Internet gambling” does not include placing, receiving, or otherwise transmitting a bet or wager where—

(i) the bet or wager is initiated and received or otherwise made exclusively within a single State;

(ii) the bet or wager and the method by which the bet or wager is initiated and received or otherwise made is expressly authorized by and placed in accordance with the laws of such State, and the State law or regulations include—

(I) age and location verification requirements reasonably designed to block access to minors and persons located out of such State; and

(II) appropriate data security standards to prevent unauthorized access by any person whose age and current location has not been verified in accordance with such State’s law or regulations; and

(iii) the bet or wager does not violate any provision of—

(I) the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.);

(II) chapter 178 of title 28 (commonly known as the “Professional and Amateur Sports Protection Act”);

(III) the Gambling Devices Transportation Act (15 U.S.C. 1171 et seq.); or

(IV) the Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.).

The Wire Act is not mentioned in this section or any other part of the UIGEA. That is because the Wire Act only covers interstate sports betting. The title of this law is the Interstate Wire Act of 1961. That makes it clear that the intent was never meant to apply to any form of intrastate gaming.

Michelle Minton notes this fact in The Original Intent of the Wire Act and Its Implications for State-based Legalization of Internet Gambling through the Las Vegas Center for Gaming Research. This paper demonstrates congressional intent of the Wire Act and how it only applies to interstate sports betting. The 2011 Justice Department opinion drew the same conclusion.

The UIGEA is pretty clear, and states abide by it

Delaware, Nevada and New Jersey regulate online gaming. All three states comply with the age and location verification language of the UIGEA. Online state lottery sales available in several states also follow the verification rules mandated by UIGEA.

There is an additional section of the UIGEA that applies to tribal gaming businesses:

(C) Intratribal transactions.— The term “unlawful Internet gambling” does not include placing, receiving, or otherwise transmitting a bet or wager where—

(i) the bet or wager is initiated and received or otherwise made exclusively—

(I) within the Indian lands of a single Indian tribe (as such terms are defined under the Indian Gaming Regulatory Act); or

(II) between the Indian lands of 2 or more Indian tribes to the extent that intertribal gaming is authorized by the Indian Gaming Regulatory Act;

(ii) the bet or wager and the method by which the bet or wager is initiated and received or otherwise made is expressly authorized by and complies with the requirements of—

(I) the applicable tribal ordinance or resolution approved by the Chairman of the National Indian Gaming Commission; and

(II) with respect to class III gaming, the applicable Tribal-State Compact;

(iii) the applicable tribal ordinance or resolution or Tribal-State Compact includes—

(I) age and location verification requirements reasonably designed to block access to minors and persons located out of the applicable Tribal lands; and

(II) appropriate data security standards to prevent unauthorized access by any person whose age and current location has not been verified in accordance with the applicable tribal ordinance or resolution or Tribal-State Compact; and

(iv) the bet or wager does not violate any provision of—

(I) the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.);

(II) chapter 178 of title 28 (commonly known as the “Professional and Amateur Sports Protection Act”);

(III) the Gambling Devices Transportation Act (15 U.S.C. 1171 et seq.); or

(IV) the Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.).

There is nothing ambiguous in the intent of Congress

The rights afforded to states and tribes are clearly defined in the UIGEA. There is nothing ambiguous about the language, at least on this topic.

There is no doubt that the intent of Congress is to permit states and tribes the right to legalize and regulate online gaming within their borders, no matter how much paid lobbyists pushing RAWA assert otherwise.