Online‐​Gambling Foes Lose a Hand

July 22, 2000 • Commentary

The House of Representatives defeated a bill this week that would have banned most forms of online gambling. In typical fashion, proponents of the Internet Gambling Prohibition Act, sponsored by Rep. Bob Goodlatte (R‐​Va.), predicted crime, bankruptcy, addiction and general debauchery if the measure didn’t pass. But consumers who gamble on the Internet risk only their own money, and do so well within their rights.

The Founders clearly thought that our “unalienable Rights” to “the Pursuit of Happiness” included gambling. Thomas Jefferson, while writing those very words into the Declaration of Independence, relaxed in his off hours by wagering with friends.

George Washington regularly bet on lotteries, card games and horse races. Washington even ran lotteries, as did Benjamin Franklin and John Hancock. As the Founders recognized, Americans enjoy the right to peaceably dispose of their income as they alone see fit, whether by investing the money, giving it away, or betting it.

This is not the first time that Congress has attempted to enact ill‐​considered Internet legislation. With the Communications Decency Act, lawmakers bet they could outlaw indecent speech on the Internet. The Supreme Court struck down the law as unconstitutional. Lawmakers tried to recoup their losses by outlawing Internet speech that might be “harmful to minors,” but again lost in court.

Despite this losing record, politicians won’t give up. Sen. Jon Kyl (R‐​Ariz.) secured passage earlier this year of his own Internet Gambling Prohibition Act, a bill very much like Goodlatte’s. Both bills put you at risk of four years in jail and $20,000 in fines if you run your office’s Final Four betting pool via e‐​mail — but not if you have your office mates phone in or hand deliver their picks. Both bills thus discriminate against Internet users.

The proposed laws also violate states’ rights. Proponents argue that the goal is merely to update the Federal Interstate Wire Act of 1961, which makes it illegal to use telephone lines to place bets or engage in other gambling activity. But while the Wire Act applies only to calls across state lines, the Kyl and Goodlatte bills would apply to all Internet messages — even those that only go across the hall. Furthermore, the Wire Act wisely declines to prohibit gambling communications that begin and end in states that allow gambling, whereas Kyl‐​Goodlatte would put all Internet gamblers at risk of federal prosecution — even for Internet gambling that violates no state law.

Suppose, for example, that California and Nevada allow certain types of gambling commerce across their shared border. The Kyl‐​Goodlatte legislation would nonetheless threaten that interstate gambling if participants used the Internet (but not if they used the phone). Where does Congress get the authority to prevent neighboring states from easing restraints on their cross‐​border commerce? Granted, Congress has constitutional authority to “regulate Commerce…among the several states.” Properly construed, however, that clause empowers Congress only to liberate interstate commerce from local restraints. It certainly does not empower Congress to crush commerce between consenting states.

Federal lawmakers keen on banning Internet gambling also cite the latest and greatest excuse for big government: protecting kids. That really amounts, however, to relieving lazy parents and schools of their responsibility to prevent children from wandering unsupervised across the Internet. Regardless of whether it really takes a village to raise a child, it certainly does not take the federal government.

What about consumer protection? Legal Internet gambling benefits consumers by increasing competition for their business and by opening access to legal remedies for objectionable business practices.

Here, as elsewhere, federal politicians should stop trading citizens’ and states’ rights for losing schemes to regulate the Internet. As the Founders recognized, Americans have an inviolable right to pursue happiness by peaceable means, a right that includes gambling.

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