Will Congress Ban Your Poker Game?
Imagine you're playing poker at a friend's house, having fun chatting and trying to make a hand out of unlucky cards. Then there's a knock at the door. Sheriff's deputies rush in, guns drawn, and bust up your friendly game with a $40 buy-in.
There have been a handful of cases where local police have raided home games, usually when they were high-stakes, advertised publicly, or collected a fee for the "house." But in general, playing poker in the comfort of your own home is legal in most states.
That is, if the game takes place in the real world. Today, while few states explicitly prohibit online poker, only three explicitly allow it. And if a handful of lawmakers in Congress and a casino mogul have their way, playing poker online will be prohibited everywhere. But not without a fight from state representatives and ordinary Americans who want online poker legalized.
Online gambling grew hot on the heels of the Internet. By 1997 consumers were spending an estimated $1 billion annually gambling online, with around 60 percent coming from the U.S. But while nations around the world passed regulations to capitalize on this growing market, American lawmakers looked for ways to curtail the activity. Despite their efforts, the legality of online gambling in the U.S. remained in a gray area. This lack of clarity kept states from attempting to regulate the activity, but did little to stop Americans from anteing up. Between 2003 and 2010 we spent about $30 billion gambling on foreign-operated gambling websites.
Everything changed in 2011, when the Department of Justice issued a memo clearly stating that no federal laws banned online gambling within states, so long as the wagers were unrelated to sports. This clarification allowed states to move forward with legalizing and regulating intrastate online gambling. Delaware, New Jersey, and Nevada have already done so. Ten other states, including Pennsylvania and California, are considering following suit to attract new tax revenue and institute protections for consumers who wish to gamble online.
Not everyone is happy with these developments. Sands Casino chairman Sheldon Adelson has said he's "willing to spend whatever it takes" to put a stop to the spread of online gambling. To that end, he had one of his lobbyists draft a bill, the Restoration of America's Wire Act (H.R. 707), that would rewrite a law from 1961 to create a de facto national prohibition and outlaw the types of gambling legalized by the states, including net poker.
Adelson, who happens to be the single biggest donor to the Republican National Committee, unsurprisingly has found allies among Republican members of Congress. What is surprising, however, is the apparent lack of concern by the bill's sponsor in the House, Rep. Jason Chaffetz (R., Utah), about the legislation's implication for the principle of states' rights — a feature of American government he and other Republicans have fervently defended in the past. A federal law that overturns laws democratically enacted by states — on the pretext that all online commerce is really interstate commerce, simply because Internet data is often sent through servers across state lines, even if the transaction begins and ends on computers in the same state — represents a violation of this principle.
While some leaders in Congress, including House Speaker John Boehner (R., Ohio) and Senate Majority Leader Harry Reid (D., Nevada), have thrown their support behind Adelson's bill, thousands of people have expressed their opposition to the effort. Nearly 4,000 people have signed the White House petition asking President Obama to veto any proposal to create a national online-gambling prohibition. While short of the 100,000 signatures needed to prompt a response from the White House, it demonstrates that thousands of Americans — including legendary poker players like Doyle "Texas Dolly" Brunson and Phil Hellmuth — want states to have a chance to decide for themselves whether to allow and regulate online gambling within their borders.
States are fighting back, too. In October 2014 the New Jersey state Assembly passed a resolution urging Congress to defeat Adelson's bill. And just this week Pennsylvania's House Gaming Oversight Committee passed a similar resolution, asking Congress and the Pennsylvania delegation to oppose such a ban.
The question is: Who will Congress listen to, the states and average Americans, or a multimillionaire campaign mega-donor?
Michelle Minton is a fellow at the Competitive Enterprise Institute, a free-market think tank in Washington, D.C.