Chaffetz Hearing for Federal Online Gambling Ban a Total Failure

In an effort to promote a federal ban on internet-based gambling, Rep. Jason Chaffetz (R-UT) opened a hearing recently titled A Casino in Every Smartphone - Law Enforcement Implications. The hearing, before the House Oversight Committee that Rep. Chaffetz chairs, not only failed to make the case for his Restoration of America’s Wire Act (RAWA), it also made a strong case against the bill. Members of Congress of both parties, as well as the witnesses Chaffetz invited to the hearing, gave strong testimony in favor of legal and regulated in-state online gambling.

Rep. Chaffetz opened the hearing making a statement about how RAWA would supposedly restore what he claims is the previous interpretation of the Wire Act against online gambling that he says was overturned by the interpretation by the Office of Legal Counsel in December of 2011. Chaffetz, who is advancing RAWA on behalf of Las Vegas casino magnate Sheldon Adelson, argued that legalized internet gambling in any states will make it impossible to prohibit it in any states, such as his own state of Utah, which has legislated against online gambling in that state.

Speaking about RAWA, which would effectively ban internet-based gambling in all states, Chaffetz quite absurdly stated, “I believe the piece of legislation that I introduced, Restoring America’s Wire Act, is a states’ rights bill.”

Adding his support for RAWA, South Carolina Attorney General Alan Wilson argued that Congress can regulate gambling online through the Commerce Clause. Wilson was one of several states attorneys general that were identified as endorsing RAWA.

“It is not a violation of the Tenth Amendment when Congress has the authority to regulate online gambling under the Commerce Clause,” Wilson told the committee, “removal of the online gambling provision of the Wire Act (by the OLC) has eroded the states ability to prohibit or regulate, however they want, gambling in their states.”

Rep. Mick Mulvaney (R-SC) strongly refuted this point of view, arguing that if the technology exists to allow some states to legalize and regulate themselves online gambling in such a way that residents of states that prohibit, can be prevented from accessing it from those other states, that the federal government has no basis under the Commerce Clause to prohibit or regulate online gambling within the borders of individual states.

Mulvaney cited Wilson’s support of state authority on a list of other issues, as well as his support of RAWA before the House Oversight Committee, and said he “can’t square those two things,” in reference to Wilson’s contradiction.

“That sounds like you’re for federal control…(the reinterpretation of the Wire Act) should not legalize gambling activities that states make illegal,” Mulvaney asked, “should the federal government also make illegal that which others states have made legal?”

Wilson did not address the contradiction that Mulvaney addressed, but simply re-asserted  his contention that legalizing online gambling would force it on states that have chosen to prohibit it and that Congress has authority to federally regulate internet-based gambling under the Commerce Clause. Despite the availability of technology, cited by former Nevada state gaming board member Mark Lipparelli earlier before the committee, Wilson continued to claim in-state online gambling in any states would force it on other states.

Mulvaney pointed out that states will lose their ability to legalize and regulate in-state online gambling if RAWA is enacted, and asked Wilson, “Isn’t there perhaps another way to prevent kids in South Carolina from accessing legal gambling sites New Jersey, Nevada, or Delaware other than federal regulation?”

Precisely that ability through technology exists and is being employed in the three states have have legalized and are effectively regulating online gambling – Nevada, New Jersey, and Delaware, Lipparelli pointed out, in also stating that “From a regulatory and law enforcement prospective, Nevada, New Jersey, and Delaware have been successful. Where there were concerns… these states have had good success.”

Additionally, Rep. Mulvaney mentioned a bill by another member of Congress that proposes to ban the sales of firearms and ammunition over the internet, for the same reason supporters of banning internet-based gambling want to pass RAWA, because the laws of one state are tough to enforce in other states, if a citizen can circumvent a ban on guns sales or online gambling in their own states by purchasing a gun or gambling online via another state.

Mulvaney highlighted how the basis for banning internet-based gambling via RAWA could also be used to restrict Second Amendment rights to purchase firearms and ammunition, arguing, “That’s what I”m worried about, that we’re going go through regulation and expand the role of the federal government as opposed to limit it.”

At the end of the hearing, the overwhelming weight of the questions and testimony illustrated that states can effectively determine their own course on whether to legalize and effective regulate online gaming, and enacting legislation like RAWA is both unnecessary for consumer protections against abuses of online gambling sites, and would expand the role of the federal government in violation of the Tenth Amendment. The strong argument for limited government easily prevailed today before the House Oversight Committee, in a hearing that was held to generate support for legislation to ban internet-based gambling.

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