2006 – #7 © Copyright 2006, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I Nelson Rose, Whittier Law School, Costa Mesa, CA

The United States Congress has lost sight of one fundamental fact about gambling: It is up to the states, not the federal government, to decide what forms of gambling should be legal.

The states have always made public policy when it comes to both legal and illegal gambling.

States are free and even encouraged to try social experiments. So, if New Jersey wants to legalize casinos to revive a dying resort, it can do so. If it works, other states can follow. But states like Utah are free to keep all forms of gambling illegal, if they wish.

Gambling is an activity that has always come under the states’ police power, which is the right and obligation of the states to protect the health, safety, welfare and morality of their residents.

The idea that the federal government can tell a state what its public policy toward gambling must be violates the very idea of our union of states.

So, why is Congress considering bills to outlaw all forms of Internet gambling? Even with these bills, Congress recognizes that states have the right to operate remote wagering on horse races and state lotteries. So, why are casino games, bingo and poker not also being left up to the states?

The irrationality of the pending legislation can be seen in its treatment of horseracing versus dogracing. Interstate betting on horse races would remain legal, but the exact same wagers would not be allowed on dog races.

The solution to the problem of Internet gambling already exists. In December 2000, Congress amended the Interstate Horseracing Act to expressly allow patrons to bet from their homes and offices by phone or computer, so long as the state where the bettor is and the state where the bet is accepted have made such gambling legal.

(As a side note, the U.S. Department of Justice has taken the position that all cross-border betting is illegal, even on horse races. Besides being a great surprise to the horseracing industry, which would not survive without off-track and inter-track betting, the position is just plain silly – why would Congress pass an Interstate Horseracing Act, if it wanted to outlaw interstate horseracing?)

There is no reason why the states should have the power to decide whether bettors can bet by phone or computer on horse races but not have the same power to make public policy on games like poker. Why should the federal government care if states with legal poker, like Nevada, New Jersey and California want to allow their licensed poker rooms to operate online, and take bets from each other. As with horseracing, no one is forcing Utah to change its policy of complete prohibition.

Allowing the states to decide whether they will license operators and permit their residents to play poker online would also solve another problem. The World Trade Organization found the U.S. was discriminating against Antigua, because the U.S. only allows state-licensed books to accept bets on horse races.

Antigua and every other foreign nation and state should be allowed to make the same decision about online gambling as the U.S. states.

But only licensed operators, who meet the same standards as American poker rooms, would be allowed to take bets from the U.S. And these foreign states would have to allow their residents to bet with U.S. online operators.

It is always dangerous to predict that Congress will act rationally. But somebody is going to point out that if the states are competent to make up their own minds on horseracing, they are competent to do the same with dogracing, bingo, casinos and poker.

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© Copyright 2006. Professor I Nelson Rose is recognized as one of the world’s leading experts on gambling law. His latest books, Gaming Law: Cases and Materials and Internet Gaming Law, are available through his website, www.GamblingAndTheLaw.com.