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CEI Study Exposes Intellectual Dishonesty of Gambling Ban Proponents

Red herrings have long been a favored tactic used by Washington DC insiders to justify otherwise illegitimate activities. Occasionally, these insiders’ ploys are exposed and undermined by an unyielding torrent of facts. Such is the case for proponents of legislation intended to overturn states’ rights to self-determination on the issue of Internet gaming by imposing a sweeping federal ban on the activity.

Billionaire casino owner Sheldon Adelson is pushing for the measure to protect profits at his land-based casinos. Yet the bill’s authors, Congressman Rep. Jason Chaffetz (R-UT)Heritage ActionScorecardRep. Jason Chaffetz70%House Republican AverageSee Full Scorecard70% (R-UT) and Sen. Lindsey Graham (R-SC)Heritage ActionScorecardSen. Lindsey Graham49%Senate Republican AverageSee Full Scorecard49% (R-SC) have repeatedly asserted more moral motivations for introducing the “Restore America’s Wire Act”.  They allege that a 2011 decision clarifying that the Department of Justice (DOJ) that the 1964 Wire Act does not prohibit non-sports Internet gambling in America is an “overreach” and is contrary to the original intent of the Wire Act’s authors.

A study recently written by Competitive Enterprise Institute (CEI) scholar Michelle Minton and published by the University of Nevada Las Vegas International Gaming Institute lays bare the intellectual dishonesty of Chaffetz’s and Graham’s arguments.  Minton examines the legislative history of the Wire Act and finds that it “was originally intended and long understood as a narrow and targeted weapon to assist the states in preventing organized crime from taking bets on sports—not as a broad federal prohibition that would prevent states from legalizing online gambling within their borders.”

Minton also finds that a “[T]extual analysis is not the only evidence supporting a narrow reading of the Wire Act. Discussions between Robert F. Kennedy, his assistants, and members of Congress in committee hearings on the Wire Act make it clear that the proposal was understood from the beginning, by both those who wrote and those who enacted it, as a prohibition only on sports-gambling transmissions.”

“During a 1998 hearing on Rep. Robert Goodlatte (R-VA)Heritage ActionScorecardRep. Robert Goodlatte71%House Republican AverageSee Full Scorecard71%’s Internet Gambling Prohibition Act, Assistant Attorney General for the DOJ’s Criminal Division Kevin DiGregory testified that while existing federal legislation could be used to prohibit most forms of online gambling, it would require amendment to apply beyond sports betting: ‘The advent of Internet gambling may have diminished the overall effectiveness of the Wire Communications Act, in part, because that statute may relate only to sports betting and not to the type of real-time interactive gambling (e.g., poker) that the Internet now makes possible for the first time.’”

Minton concludes that it was the Clinton and Bush administrations that have erroneously misinterpreted the Wire Act saying, “While RAWA supporters claim that Obama’s DOJ unilaterally reinterpreted the Wire Act, the actual reinterpretation was made by the Department of Justice during the Clinton and Bush administrations.”

As a result, the Obama Department of Justice’s 2011 decision actually has the impact of rectifying past overreaches by the federal government.

The reality is that while Minton’s study removes the only leg on which Chaffetz and Graham are standing it really shouldn’t matter. If the Wire Act had been intended to prohibit intrastate Internet gaming, it would have done so illegitimately and warranted correction. The regulation of gaming is not a power granted to the federal government and thus it is the exclusive purview of the individual states.

As the campaign season draws to a close attention is increasingly being paid to the congressional “Lame Duck” session planned immediately following Election Day.  Traditionally such sessions are marked by brazen attempts at ramming through legislation impossible to pass under regular order. Some watchers have speculated that Adelson’s  substantial generosity towards Republican campaigns may buy him such a path for his Internet gambling ban.

The findings in Minton’s study should be a wakeup call for any Republican supporting the bill. When your proposal is to the left of Robert F. Kennedy on states’ rights, it is hardly a conservative solution you want to answer for in your next primary.

RAWA is a crony power grab put forth exclusive to protect a rich man’s wealth at the expense of the Constitution’s provisions to protect state sovereignty.  It should embarrass Republicans that something this egregious is being proposed by two of their own.

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