US Senators Revive Federal Online Gambling Ban Efforts

Advocates of a federal online gambling ban are framing the recent legalization of iGaming in Pennsylvania as a clear signal that the federal government needs to involve itself in gambling at the state level, in a letter sent to the Department of Justice.

The letter was co-signed by two of the usual suspects in the anti-online gambling movement, Sens. Diane Feinstein (D-CA) and Lindsey Graham (R-SC).

This is far from the first such letter, and as usual, it’s riddled with mischaracterizations, conjecture and outright falsehoods.

Claim No. 1: The 1961 Wire Act was written to outlaw online gambling

The pair open by saying the 2011 OLC opinion, “Reversed 50 years of interpreting the Wire Act to prohibit all gambling online.”

This is a pretty breathtaking sentence considering the DOJ first weighed in on the issue of online gambling in a 2002 opinion.

And there’s the tiny issue that the internet and “online” didn’t exist 50 years ago.

Claim No. 2: The FBI has concluded…

One of the most frustrating elements of the letter is its mischaracterization of a n FBI letter from 2013.

The Graham-Feinstein letter says:

“the FBI has concluded that ‘online casinos are vulnerable to a wide array of criminal schemes,’ including money laundering and ventures by transnational organized crime groups.”

What the FBI actually said was, illegal, offshore online gambling could be used for criminal activity.

As OPR has written in the past: “The FBI letter was not a warning; it was a response to a Congressional request about the potential dangers of money laundering via online gambling. The FBI also concluded these threats were largely preventable and detectable.”

In fact, later in the letter, the FBI explicitly states that, “Many of these methods could be detected and thwarted by a prudent online casino.”

In other words, the FBI letter was making the case for regulation.

And that brings us to the next claim in the Graham-Feinstein letter.

Claim No. 3: Conflating regulated online gambling with unregulated

In response to a previous anti-online gambling letter signed by 10 state attorneys general, Rep. Dina Titus (D-NV) told Online Poker Report: “… throughout the letter, there is no distinction made between legal online gaming and illegal operations. In states where online gaming is legal and regulated, there are extensive consumer protections in place that are enforced by state law enforcement authorities.”

Claim No. 4: Regulated markets are infringing on the rights of other states

In one of the worst cases of projection in history, the letter claims that states that have legalized online gambling within their borders are infringing on the rights of states that haven’t taken action. This claim is made despite all evidence that the geolocation technology that prevents users from outside the state of gaining access to licensed online gambling sites is highly effective.

Imagine living in New Hampshire and having the federal government tell the state it can no longer sell fireworks because it needs to protect the interest of Massachusetts, where the sale of fireworks is illegal.

That is essentially the states’ rights case the letter is making. Even though the technology exists to ensure residents in other states cannot play online in New Jersey, we need to outlaw online gambling nationwide and shut down New Jersey online casinos.

Apparently states rights are only valid on one side of the issue: the side Sens. Feinstein and Graham are on.