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Big debate: US igaming ban – in the best interests of the country?

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For Jon Bruning from the Coalition to Stop Internet Gambling, a US igaming ban would confirm the fact Internet gambling is already illegal; while Caesars’ Jan Jones argues that regulation is the only viable way to control the activity and protect players.

For Jon Bruning from the Coalition to Stop Internet Gambling, a US igaming ban would confirm the fact Internet gambling is already illegal; while Caesars’ Jan Jones argues that regulation is the only viable way to control the activity and protect players.

“Yes”: Jon Bruning, Counsel, Coalition to Stop Internet Gambling
Would a ban on Internet gambling be in the best interests of the United States? That question is misleading – Internet gambling already IS illegal in the United States. It is just that the Obama Administration decided to stop enforcing the law, paving the way for states to authorise online casinos, as long as those casinos do not accept sports bets.

From the day President Kennedy signed the Wire Act in 1961, and for five decades thereafter, the Department of Justice consistently interpreted the Federal Wire Act as covering all forms of gambling—whether it be on sports, horses, casino games, or lotteries.

To give law enforcement the tools to shut down online poker and other forms of Internet gambling, Congress reinforced this interpretation in 2006, when it enacted the Unlawful Internet Gambling Enforcement Act (UIGEA), prohibiting any gambling businesses from knowingly accepting payments in connection with illegal online gambling.

Then in December 2011, the Obama Administration’s DOJ quietly issued its opinion reversing 50 years of consistent legal interpretation of the Wire Act. No laws were changed by Congress. No federal court decision was issued. No new rules were promulgated. 

The opinion itself remains in dispute. Former Attorney General Loretta Lynch asserted the opinion does not carry the force of law. Legal scholars have concluded the opinion flies in the face of the statute’s text, purpose, and history. Many American banks refuse to process online gaming transactions because the charges “don’t comply with federal regulations.”

During his confirmation hearing, Attorney General Jeff Sessions testified he was “shocked” at the DOJ opinion, stating that, “I did oppose it when it happened and it seemed to me to be unusual…” Sessions committed to revisit the opinion.

If Sessions withdraws the DOJ opinion (much like Obama’s DOJ withdrew certain Bush DOJ opinions), no online casinos would be grandfathered or protected from prosecution, regardless of when they were authorised.

Withdrawal would return the DOJ to the original, longstanding interpretation of the Wire Act prohibiting all sports and non-sports online gambling sites alike.

Regardless of whether Attorney General Sessions acts, any business offering online casinos, or handling online wagers, may be sued under the Racketeer Influenced and Corrupt Organizations Act (“RICO”).

RICO allows any person injured by a violation of certain “predicate” statutes, including the Wire Act, to bring suit for “treble damages”—an award totaling three times the amount of injury suffered.

Suit can be brought by families of problem gamblers who lost their earnings on online casinos or convenience stores who have seen lottery ticket sales drop.

States authorising Internet gambling, and the companies that offer and facilitate online casinos, are rolling the dice hoping the Trump Administration will continue Obama’s selective enforcement of the Wire Act, and that persons harmed by online casinos won’t turn to the courts and sue for treble damages.

That’s a hand some may wish to play, but odds are sooner or later, they will have to fold.

“No”: Jan Jones, Executive VP, Public Policy and Corporate Responsibility, Caesars Entertainment
Not only is a ban on Internet gambling not in the best interests of the United States, but a ban on Internet gambling will continue to expose millions of American adults and children to unacceptable public health and safety risks. Here’s why.

Millions of Americans gamble on Internet sites in all 50 states, notwithstanding laws that prohibit such activity. Unregulated, illegal Internet gambling provides no consumer protections against underage gambling, no protections for problem gamblers, no assurances that consumers won’t be defrauded and that the operators of Internet gambling sites aren’t criminals, and no tax collections from the illegal market.

Advocates of a federal ban first pretend that banning illegal Internet gambling works. Then they pretend that it protects Americans.

Their rhetoric conflates the consequences of illegal Internet gambling with the consequences of regulated Internet gambling. And they ignore the evidence from states, provinces, and countries around the world that demonstrate not only that regulation is possible, but that it is enormously effective.

No one disputes that illegal Internet gambling poses problems. Experts from various fields and with varying perspectives on the legalisation of Internet gambling agree that illegal Internet gambling is so popular with Americans today that it is a multi-billion dollar market.

They also agree that illegal Internet gambling site operators do not provide American consumers with the kinds of protections offered both in brick-and-mortar commercial gaming or other legitimate forms of eCommerce:

  • no protections against fraud and privacy violations; no protections against money laundering;
  • no assurance that the game providers aren’t funneling Internet gambling proceeds to support other criminal activities;
  • no respect for state borders and state decisions on what kinds of gambling are to be offered to consumers; no collection of state tax revenues;
  • no technologies that can prevent minors from gambling;
  • and no protections that discourage problem gambling.

But where advocates of a ban on Internet gambling go astray is in their wish to turn back the clock on the Internet, and magically pretend that prohibition will solve the problems associated with unauthorized Internet gambling. We know prohibition doesn’t work – witness the already thriving illegal market.

Advocates of a federal ban claim that Internet gambling by its nature can’t be regulated, and in fact that even with regulation it would be a particularly dangerous form of gambling. 

But experts from perspectives as diverse as child protection advocates, law enforcement officials (including the Fraternal Order of Police and the National Association of Police Chiefs), and problem gambling experts (including the head of the National Council on Problem Gambling) have demonstrated that continuing to drive Internet gambling underground is dangerous to consumers.

They also therefore agree regulation is a better approach if we’re sincerely interested in reducing the risks associated with illegal Internet gambling.

These expert opinions are valuable. But the most convincing evidence that attempts to ban Internet gambling are misplaced are the real-life experiences of Delaware, New Jersey, and Nevada, which demonstrate that effective regulation prevents minors from playing, restricts the activity to states that permit it, and keeps the games and their operators fair, transparent, and free of criminal involvement.

Not only do states have a right to provide Internet gambling within their borders, but they are exercising this right consistent with the highest principles of regulatory oversight and consumer protection. They should and must be permitted to continue to decide for themselves if and how to regulate Internet gambling.

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