Newsweek Feature Claims Online Gambling Is a Threat to American Family
A feature running this week in Newsweek claims that online gambling is a threat to the American family. The article is receiving significant attention among major online gambling news websites and blogs, due to the seemingly one-sided and sensationalistic nature of the reporting.
The article claims that Internet gambling is the next big threat to the existence and cohesion of the American nuclear family. The feature implies that online gaming targets underage children and includes a photo of a youth playing games on a tablet computer.
Recent History of US Gaming law
The history of electronic gaming law over the last several decades is discussed in the piece. The broad implication is that the current administration has opened the door for online gambling, therefore subjecting average Americans to one more depredation. At one point, the writer suggests that the 2011 Department of Justice opinion on the UIGEA overturned 50 years of gambling law in this country.
Because such assertions are hard to justify, a reasoned discussion of the 1961 Wire Act and 2006 Unlawful International Gambling Enforcement Act might be in order. A discussion of the technology used to support and limit Internet gambling also might be useful. Whatever one’s opinion on the morality of betting on games of skill or the social problems caused by compulsive gambling, it helps to be informed, instead of misinformed.
The 1961 Wire Act
In 1961, the Kennedy Administration worked with the Democrat-controlled U.S. Congress to pass the Wire Act. The new law was part of President John F. Kennedy and Attorney General Robert Kennedy’s plan to bring organized crime under control in America. The Wire Act made it illegal to place sports bets over the telephone lines. The law was quite specific in naming “sports betting” as the offense being targeted.
Because casino card games like poker, blackjack, and baccarat cannot be played over the phone, no thought was made of mentioning those games. The same can be said of wheel gaming like roulette, machine gaming like slots, or dice gaming like craps. It was not envisioned at the time that such gaming would be covered by the Wire Act, because no one imagined such games would ever be played over the phone lines or other forms of long-distance electronic communication. From 1961 to 2006, the Wire Act covered sports gambling alone.
Internet Gambling
When the Internet became mainstream, it soon became apparent that gambling could and would be conducted there. By 1994, companies like Bodog were taking online bets, while gaming software designers like Microgaming were finding ways to support online betting. Gambling on the Internet was known, but not to a wider audience, throughout the 1990’s. In 2002, a Department of Justice memo suggested that the Wire Act should apply to online gambling, but no formal law was on the books stipulating such an interpretation of the law.
After online communications became possible for average people, it would be another 10 years before online gambling itself became mainstream. This happened after the 2003 World Series of Poker Main Event was broadcast on ESPN. The WSOP had been on ESPN for years, but the 2003 Main Event featured a little-known online qualifier (Chris Moneymaker) who played his way into the tournament through a PokerStars satellite event and then won the championship.
The story resonated with the American viewing audience. Chris Moneymaker looked and acted like a regular guy, and millions of average folks across the USA thought they could do the same as their new hero. The era where the World Series of Poker Main Event attracted thousands of gamblers had begun. The expansion of the field at the WSOP Main Event was just the starkest sign of a new fad, as professional poker suddenly was in great demand online and on television. The Poker Boom had happened, with an explosion of programming online and a lot of cash to be made for the operators on the Internet.
UIGEA Passed
Suddenly, online gambling was conspicuous. That’s never a particularly good thing for gambling. Many people see nothing wrong with betting. Others believe it is a sin and should be banned. Many people fall somewhere between those two opinions, seeing gambling as a bit unseemly and perhaps a bad idea. These people are willing to ignore such things, so long as it’s not in their face and on their conscience. When poker was everywhere, horror stories about problem gambling began to resonate, too.
In September 2006, the Republican-led U.S. Congress decided to pass the Unlawful Internet Gambling Enforcement Act. The votes didn’t exist to get this law passed directly, so it had to be attached to the Safe Port Act, which no good red-blooded American politician in that time could have voted against. The UIGEA specifically stated that the 1961 Wire Act applied to online gambling, too. Exceptions were made for horse racing, lottery betting, and fantasy sports.
Authorities claimed the UIGEA applied not only to sports betting, but also to online casinos and poker sites. The problem was, the Wire Act never mentioned those activities, and thus never addressed those types of gambling. If the new law simply updated telephone gambling to linked online computer gambling, then a solid argument could be made that the UIGEA only applied to online sports betting.
2011 DoJ Opinion
Still, U.S. federal authorities from 2006 to 2011 took the stance that the UIGEA banned online sportsbooks, casinos, and card rooms in the United States. That was the opinion until the states of Illinois and New York wrote the U.S. Department of Justice late in 2011, asking its opinion on the UIGEA’s scope.
The Department of Justice replied that it viewed the UIGEA and Wire Act as applying only to sports betting. Casino gambling and poker were never covered under the Wire Act, so they should not be covered under the UIGEA, either. Suddenly, it was legal for single U.S. states to license and regulate casino and poker sites. Delaware, Nevada, and New Jersey chose to do just that.
Restoration of the Wire Act
This Department of Justice opinion did not satisfy some people. Sheldon Adelson, who’s made $38 billion or so off of land-based gamblers, decided that online gambling was worse and needed to be stopped, for the good of problem gamblers and underage players. Adelson said he would spend as much money as needed to see online gambling banned in the USA.
In the spring of 2014, also hosted Republican presidential hopefuls in Las Vegas. Because he spent $90 million in the 2012 election, the GOP hopefuls were willing to fawn over him, and promises might have been made to support his anti-online gambling stance. As so often in the past, the worst enemies of the American gambling industry were the leaders of the American gambling industry.
Back in Washington DC, other politicians were willing to support Adelson’s goals, too. Also in the spring of 2014, Senator Lindsey Graham of South Carolina and Representative Jason Chaffetz introduced the Restoration of the Wire Act bill to their respective houses of Congress. They wanted to ban all online gambling in the United States, with the exception of horse racing, lottery gaming, and fantasy sports.
Who Supports States’ Rights?
When they announced their bill, the two men suggested that New Jersey, Nevada, and Delaware were trying to impose their pro-gambling stance on the other 47 U.S. states. Lindsey Graham said South Carolina had banned online slots, but thanks to Chris Christie’s state legalizing online casinos, a person with a phone in South Carolina now could gamble on online slots.
There simply is no polite way to say this, but Graham’s statement flies in the face of the truth. Geolocation software on mobile devices and laptops can assure that a person anywhere outside of New Jersey cannot play on the NJ gaming sites. No one in South Carolina is endangered by New Jersey gambling, because the software won’t allow them to play. In fact, if the Restoration of the Wire Act was passed, South Carolina effectively would be imposing its anti-gambling laws on New Jersey–not the other way around.
Destroying the American Family
Many of the charges leveled against online gambling simply hold no weight. Unless one can prove that the Wire Act was used to prosecute casino gambling over the last few decades, the 2011 Justice Department memo did not overturn 50 years of U.S. gambling law. As it’s been shown, no one in South Carolina or Utah (Chaffetz’s state) can gamble on the Nevada, Delaware, or New Jersey gaming sites.
So the question remains: will online gambling destroy the American family? When people talk about destroying institutions like “the family” or marriage, one has to ask what those institutions are like in the here-and-now.
In a country where half of all marriages end in divorce and single parenting is becoming the norm, it’s proper to wonder if institutions like the traditional family haven’t already been destroyed. Gambling might reveal already-existing weaknesses in a family structure, but the assault on family values began a long time ago. It was the 1980’s when most households began needing two money-earners to maintain themselves in the middle class. The family has been losing ground ever since. For a generation, both parents tend to work, while their children are often left with a television set or a computer as a babysitter.
Online gambling does bring hardship to some families. A compulsive gambler can lose a lot of money playing at online casinos, poker rooms, and sports books. Though licensed online gambling legalizes and legitimizes that gaming, it does not “open the door” to such activity. From 2006 to 2011, there was a flourishing online gambling industry of sites which accepted US players. Online gambling never went away. Instead, the most responsible and respected companies–the ones traded on stock exchanges worldwide–left the U.S. market. What was left were the offshore companies that refused to abide by U.S. laws, and which American authorities had no ways of touching.
Such an unregulated environment is the worst possible place a problem gambler can play. These places are easy to find and easy to access. The UIGEA did nothing to protect American families. All it did was drive online gambling underground, where Americans with gambling addiction (and their families) had no protections.
