The evils that follow the passage of "The Internet Gambling Prohibition Act of 1999"

By Lisa S. Dean
web posted July 3, 2000

Well, our federal legislators are at it again. What is "it", you might ask.

Why, protecting us from ourselves of course. This time, they're trying to keep us from hurting ourselves on the Internet. Two years ago, they tried to protect us by banning online pornography and other "indecent" material. The Supreme Court reminded them that their method ran contrary to the Constitution and their efforts largely failed.

Then they tried to ban indecent material by mandating that filtering software be loaded on to the computer systems in our nation's schools and libraries. This effort, while it may pass the Congress will fail in the "real world" because what these same legislators don't realize is that filters only filter what they are set to filter and liberal school teachers and librarians are already setting the systems to filter out religious and conservative websites while allowing the pro-abortion, pro-radical environmental sites to be seen by children. So legislators' attempts at protecting us from harm is actually harming us.

Now there's a new effort to protect us sponsored in the House by Rep. Bob Goodlatte of Virginia and in the Senate, Senator Jon Kyl of Arizona, both of whom I would normally agree with on matters related to social issues. But not this time. "The Internet Gambling Prohibition Act of 1999" or H.R. 3125 is an effort that would ban gambling on the Internet in the hopes of helping people who have gambling problems and keeping children from being denied decent lives because one or both of their parents have a gambling problem.

An admirable attempt at a worthy cause, I agree. However, there are practical and even Constitutional problems with the legislation that even some anti-gambling groups say make it unworthy to become U.S. law.

While there is a need to be concerned about the speed with which gambling has spread from Las Vegas into American living rooms, there is a greater concern about the how much the long arm of the federal government has spread from Washington, DC, into American living rooms.

Regardless of the problem, Congress first needs to remember that the U.S. Constitution is still the supreme law of the land and according to our Constitution, the issue of gambling has wisely been dealt with at the state level. Despite the fact that we are now in a digital age and many industries are moving online, the laws that have governed us in the real world, should still apply in the virtual one. That includes gambling.

There are five federal laws that outline and enforce gambling restrictions and the provisions outlined in these laws already solve the problems concerning Internet gambling. So, given that, do we really need another federal law outlawing what has already been outlawed five times over?

Second, when the sponsors of this legislation talk about banning Internet gambling, what they are really talking about is state lotteries because it essentially states that all Internet gambling should be prohibited-except gambling on horse racing, dog racing, and similar activity. Why such broad carve-outs? If the sponsors say they want to ban gambling on the Internet, why not ban some of the most popular forms of gambling, namely horse racing, on the Internet? The answer to that question lies in an article in the October 22, 1999 edition of Racing Post. Rupert Murdoch's News Corporation happens to be a major partner in the Television Games Network, which broadcasts horse races over cable and satellite systems. That same company is developing Internet betting software in anticipation of this bill's passage. But Television Games Network isn't the only company within the gambling industry that is hopeful. has signed a ten-year agreement with an Australian gambling company for access to their Internet betting software.

So really H.R. 3125 doesn't eliminate the problem of Internet gambling as its sponsors claim, but rather it dictate to the states how they must regulate their lotteries. That's not a job for the federal government. In fact, this bill allows for some Internet gambling but outlaws other forms which boiled down, is nothing more than the federal government picking winners and losers in the marketplace. Where does the federal government gets the moral or legal authority to say that a bet on the Kentucky Derby is acceptable, but a bet on the Superbowl is not?

Third, and most importantly is the issue of the federal government imposing content regulation on the Internet. In addition, how does the federal government propose to enforce this nearly unenforceable legislation? In order to know whether someone is gambling online, law enforcement would have to have access to that person's computer. Is law enforcement going to begin to monitor everyone's whereabouts on the Internet? Will it expand the list of material to be filtered to include a list of federal-government-banned sites that Internet Service Providers will have to block for its customers?

This may sound extreme but it is difficult to see how, short of tactics like these, that the government could be at all effective in enforcing this bill if it becomes law.

Also, that same monitoring structure could be transformed in to a tax structure for the Net. By suggesting who can and cannot place bets online, it divides the Internet up by geography-which is exactly what those who wish to tax the Internet need to have in place. Therefore this legislation could actually undo much of the work already completed by industry and others to keep the Internet a tax-free medium.

There is one more point to be made along these lines. When we use the term "gambling", we are referring to casinos, horse racing, lotteries and other games of chance. The definition is a rather narrow one but for those who are seeking the opportunity to regulate the Internet, they would likely use this legislation to expand the definition of gambling to include online auctions or even day trading. From there, it is not much of a stretch to include other industries, such as the firearms industry, that Washington deems "harmful."

So the bottom line is that while Washington legislators are busy categorizing and classifying online material that may be harmful to us in their vain attempt to protect us, the question remains, who will ultimately protect us from them?

Lisa Dean is Vice President for Technology Policy at the Free Congress Foundation.

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