In a significant legislative step, the state of Michigan decided in December to legalize online gambling. Governor Rick Snyder vetoed the bill, which pushes the process back. Michigan could join Nevada, New Jersey, Delaware, and Pennsylvania in bringing life to this new marketplace.
Michigan's legalization process for online gambling has been an uphill battle. The state's gambling laws are laid out in the Michigan Gaming Control And Revenue Act of 1996, through which three casinos became legal in Detroit. This did not include casinos established on tribal land. Despite an increase in lotteries, horse race betting, and the establishment a dozen new casinos, sports betting and online gambling in general was not in included in this act and remained illegal.
This changed in December, when the state legislature green-lighted online gambling just days before Christmas. Gov. Snyder’s pen didn’t move the inevitable legalization process further, but even if it moves on a year from now, it appears that the state’s long fight for legalization could be short-circuited by Washington, D.C., insiders shortly after.
Supposedly, the Department of Justice’s Office of Legal Counsel is preparing to release a new opinion stating its belief that current law prohibits all forms of online gambling. This is likely because of the efforts of Sands Casino owner Sheldon Adelson, who has led the fight to keep online gaming illegal. He backs the and claimed to Forbes that online gambling could make people lose their homes.
For years Adelson has also been pushing the Restoration of America’s Wire Act, or RAWA, which would apply the Interstate Wire Act of 1961 to all forms of gambling, hence enforcing a federal prohibition. RAWA would also challenge online lottery purchases in Michigan, Illinois, and Georgia. The casino tycoon Adelson is one of the very few in the industry who has not accepted the move to the digital world and is fighting hands and feet to outlaw online gambling.
Nevertheless, the Department of Justice must ignore his lobbying campaign. Michelle Minton, in a paper for the University of Nevada in Las Vegas, laid out the original intent of the Wire Act, explaining why a re-interpretation would be incorrect. Indeed, RAWA would undermine the Tenth Amendment since the powers to outlaw gambling aren't delegated to the federal government.
Furthermore, let's consider that the revenues states could miss out on due to this crony campaign by traditional casinos could indeed be astronomical for the states. The state of Pennsylvania alone has collected $400 million since the legalization of online gambling, for example. Why should the DOJ force states to give up this lucrative revenue stream?
The question for conservative lawmakers essentially is this: to whose benefit is it to listen to billionaires as opposed to reasonable and fair policies? 9 out of 10 conservatives believe that efforts to ban online gambling are a clear case of crony capitalism. With the effort of the current administration to "drain the swamp," one might want to reconsider giving the impression that the nation's capital is in the hands of wealthy casino owners who cozy up with legislators and administrators.
White House Chief of Staff Mick Mulvaney and soon to be Attorney General William Barr should help stop this bad decision on the Hill, especially because the former has explicitly been vocal on the point of state's rights. When Mick Mulvaney was still a member of Congress, he argued that if the technology exists to allow states to legalize and regulate online gambling in such a way that prevents residents of neighboring states from taking part, that the federal government has no basis under the Commerce Clause to restrict online gambling within the borders of individual states.
It is time for a thorough debate on this matter while exposing the special interests that back the campaigns opposing legal online gambling. The veto of Governor Snyder does come as a considerable setback in Michigan, yet the stakes are simply too high not to keep up the pace for this legalization battle.
Let's not fold a winning hand.
Bill Wirtz is a political commentator currently based in Belgium. His articles have been published by Newsweek, The American Conservative, the Washington Examiner, Le Monde, and Le Figaro. He is a Young Voices Advocate, a regular contributor for the Foundation for Economic Education, and works as a Policy Analyst for the Consumer Choice Center. To read more of his reports — Click Here Now.