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Gambling Away Federalism

December 14, 2017 in Economics

By Trevor Burrus

Trevor Burrus

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.

Congress should resist
attempts to override state experiments in 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 …read more

Source: OP-EDS

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