Online gambling is no longer a dirty word, it seems — many states are now treating it as a profitable enterprise to be taxed and regulated for the public good.
But don’t get too excited yet. Michigan aims to be the latest state to legalize online gambling, but bureaucrats at the Department of Justice want to strangle this development before it becomes law.
Michigan’s state legislature recently passed a bill that would legalize online gambling in the state and tax its revenue at eight percent. The state plans to use the tax money it generates from online gambling to improve local infrastructure, help rebuild Detroit, and invest in public education.
But Michigan Governor Rick Snyder decided to veto the legislation before the new year, curtailing the state’s embrace of online gambling.
Additionally, the DOJ is considering new guidelines that may stifle that opportunity. According to reports, the DOJ may issue an opinion statement that would argue all online gambling falls under the purview of the Wire Act, a law that prohibits betting through wire communications. This would reverse the agency’s prior opinion that the Wire Act only covers sports betting online.
The DOJ’s move would make a mockery of the law, states’ rights, and state economies that are set to benefit from the fruits of online gambling.
The move against online gambling is driven by one industry in particular. Casino tycoons are the driving force behind the Coalition to Stop Internet Gambling, the primary group trying to restrict betting on the internet. They see online gambling as a threat to their businesses and hope the government will help him deal with the competition. The Coalition exerted pressure on Gov. Snyder to veto Michigan’s legalization effort.
“While we’re disappointed in the legislature’s action, we’re hopeful the governor will put Michigan school revenue, the needs of addicts and family safety ahead of online casino special interests and veto the measure when it reaches his desk,” the Coalition said after the state legislature passed the bill in late December.
Even though the group has worked hard to convince Americans — particularly conservatives — about the alleged dangers of online gambling, conservatives appear to disagree with Adelson. A poll conducted at the 2017 Conservative Political Action Conference found that nine out of ten respondents viewed an online gambling ban as a bad case of crony capitalism.
The majority of Americans support the legalization of online sports betting and believe it is an issue best left to the states, not the federal government.
However, the DOJ’s potential opinion would ignore the will of the people and trample on states’ rights. Nevada, New Jersey, Delaware, and Pennsylvania have already legalized online gambling, but bureaucrats at the DOJ think their rules can overrule those laws. There’s a strong argument that the Tenth Amendment covers online gambling laws and the American public believes this is a states’ rights issue.
Thankfully, President Trump’s new chief of staff Mick Mulvaney agrees with this assessment. In 2015, then-Congressman Mulvaney came out swinging against proposals to ban online gambling.
“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 of a South Carolina attorney general who supported the ban, “Should the federal government also make illegal that which others states have made legal?”
The economic consequences of online gambling restrictions would also be disastrous. In New Jersey, online gambling has literally saved Atlantic City. In Delaware, the industry generated a record-breaking $337,000 this September. This revenue contributes to local infrastructure and helps communities in decline, which is why Michigan wants to legalize this practice.
All of this would disappear if DOJ bureaucrats had their way. So long to money for schools and hello to federal meddling.
Please note: This is a commentary piece. The views and opinions expressed within it are those of the author only and do not necessarily reflect the editorial opinion of IJR.