The online gambling industry has been very unsure about the Trump administration’s policies concerning it. However, Jeff Session, the President’s pick to be Attorney General has indicated during his confirmation hearing that he might oppose the prevailing official stance regarding online gambling. Sessions was also opposed to the Department of Justice’s attempts to interpret the Wire Act when it initially took place. However, when asked for his opinion about the issue he admitted that he hadn’t studied the matter carefully enough to provide his view on it at the present.
It is quite likely that Sessions was providing a message to the land-based casino industry in the United States, and particularly to Las Vegas mogul Sheldon Adelson that there were going to be major changes happening soon. Adelson, a major donor to the Republican Party, has lobbied vigorously to prevent the legalisation of online gambling because it has the potential to eat into the land based casinos’ revenues. One does have to wonder why Sessions decided to weigh in on online gambling when there are so many other pressing problems to address at this juncture.
Even so, it would be best if Sessions sticks to the official position of keeping online gambling legal and letting the individual states decide which way they want to do with it. In other words, he’ll have to ignore pressure from Adelson and his camp. There are many reasons why this will be the best policy in the long run.
To start with, the Wire Act was enacted in order to prevent betting on sports and not gambling as a whole. A reading of the act’s wordings will make it clear that it deals with the use of communication facilities to place money bets on sporting events. As a matter of fact, its purpose was to keep organized crime away from sporting events by catching people when they took bets over the phone. There is nothing in it that talks about poker or casino games. Furthermore, the 5th Circuit Court of Appeals ruling of November 2002 categorically stated that the act was concerned with sports betting only. It is interesting to note that the Attorney General at the time was the staunch anti-gambling John Ashcroft.
The Unlawful Internet Gambling Enforcement Act (UIGEA) was passed in 2006 purportedly to overcome the shortcomings of the Wire Act. While the law did not specify what kind of betting was illegal, it made it illegal for banks to process monetary transfers for certain restricted transactions even though it did not specify what these transactions were. At the same time, UIGEA states that payments for legal betting cannot be banned.
The industry is of the opinion that Obama’s Attorney General Eric Holder took a step in the right direction by affirming the 2002 ruling that left it up to individual states to offer online gambling as long as it was restricted to the state’s residents only. Sessions will actually find it very difficult to explain how the Wire Act can be used for anything other than sports gambling.
There is another issue at stake here and it involves the 10th amendment. Individual states have the right to enact laws and the federal government has only limited powers as given to it by the Constitution. States have a right to conduct gambling operations as they see fit, and online gambling is just an extension of it and is only different in that it uses the internet as a medium.
The most interesting factor of all is that President Donald Trump firmly supports the 10th amendment and wants to keep policies free from powerful people such Sheldon Adelson. Needless to say, the industry will adopt a watch and wait policy.