Gambling Away Federalism & an Update on This Week in Congress

It looks like Congress will pass an extension of government funding until mid-January. The joint resolution will provide a temporary extension of Sec 702 of the FISA Act. This is a victory for Campaign for Liberty members as there was a serious push to sneak a last -minute extension of the bill into law.

Campaign for Liberty members also stopped attempts to put a ban on internet gambling into the continuing resolution. My friend Trevor Burrus recently penned an article for Forbes magazine on how banning internet gambling gambles away federalism.

Read Trevor’s piece here and below:

Pennsylvania legalized online gambling in late October, becoming the fourth state to allow online betting. Some lawmakers in Washington, however, would like the federal government to override those states’ laws and prohibit online gambling nationwide. The Restoration of America’s Wire Act(RAWA), which has been floating around Congress since 2015 but is receiving renewed attention, is an attempt to assert federal control over states that have legalized online gambling. Just as states have been allowed to experiment with marijuana legalization, Congress should resist attempts to override state experiments in online gambling.

The story goes back to a 2011 Department of Justice memo that clarified the interpretation of the 1961 Federal Wire Act, which was passed to give federal officials the authority to go after the mafia. When asked by the states of New York and Illinois whether intrastate online lotteries would violate the Federal Wire Act, the DOJ clarified that the 1961 law applied only to sports betting and not to other forms of online gambling, freeing states to legalize online gambling, as Pennsylvania and others have. Since that time various lawmakers have been trying to either convince the DOJ to revisit that interpretation or to amend the Federal Wire Act—“restore” it, as the bill’s title says—to cover online gambling.

Seemingly spurred along by Pennsylvania’s law, in November Senators Feinstein (D-CA) and Graham (R-SC) wrote a letter to the DOJ asking for reconsideration of the 2011 interpretation of the Federal Wire Act. They cite the usual concerns: the children, society’s most vulnerable, and organized crime as a reason to revisit the interpretation. Yet, even if such concerns were valid, the Federal Wire Act clearly does not apply to non-sports related gambling, as CEI’s Michelle Minton has conclusively shown.

All of this arises as New Jersey is at the Supreme Court challenging a federal law, the Professional and Amateur Sports Protection Act (PASPA), which prohibits states from authorizing “a lottery, sweepstakes, or other betting, gambling, or wagering scheme based” “on one or more competitive games in which amateur or professional athletes participate.” The law, which was passed in 1992, carved out exceptions for four states—Delaware, Montana, Nevada, and Oregon—and gave New Jersey the option to legalize sports betting at casinos as long as it did so within a year after the law went into effect. New Jersey didn’t do so at the time but now it would like to. It tried twice to legalize sports betting, but each time federal courts have said that PASPA prohibits it. Now at the Supreme Court (the case was argued December 4th), the state is arguing that such a prohibition violates the Tenth Amendment by “commandeering” states to enforce federal law. The Cato Institute has filed multiplebriefs in the case, arguing that PASPA’s prohibition violates the Tenth Amendment.

Either way, the bill’s co-sponsors are almost all Republicans, purportedly the party of federalism. As we’ve seen many times, however, federalism has many fair-weather fans. Like many political ideals, commitments to federalism are often abandoned when given the opportunity to use the federal government to combat disfavored state policies. Yet anyone who has lauded the trend of “marijuana federalism” that is moving through the states, should support “gambling federalism” for the same reasons.


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