By Alex Fitzsimmons
According to the opinion, in-state Internet gambling does not violate federal law as long as it doesn't involve sports betting.
Issued just before Christmas, the opinion paves the way for states to move forward with stalled plans to introduce a variety of online gambling ventures. According to Politico, Washington, D.C., intends to offer online poker and blackjack by April, while Illinois plans to sell lottery tickets and New Jersey hopes to become the “epicenter” of online gambling.
It also protects the rights of states that oppose the expansion of online gambling, such as Florida, whose attorney general issued an opinion last week advising against the approval of new slot machines in Broward and Miami-Dade counties.
The only problem: Congress is considering federal legislation, claiming that states lack the resources to enforce Internet gambling laws. States counter that a federal law would impinge on their rights. NCSL believes Congress must preserve state authority to allow or prohibit Internet gambling. Any federal action should respect the rights of states that choose to prohibit Internet gambling.
In 2006, Congress passed the Unlawful Internet Gambling Enforcement Act, which prohibits financial transactions in support of illegal online gambling. But Congress never defined “illegal online gambling,” except to exclude Internet gambling conducted solely within the boundaries of a state or tribe. This exclusion serves as the legal basis for state sovereignty over online gambling.
According to the American Gaming Association (AGA), online gambling revenues from U.S. bettors exceeded $4 billion in 2010, but most of those revenues went to offshore operators. In a white paper issued last year, the AGA outlined measures to legalize and regulate online gambling in the United States. These measures would secure the jobs and tax revenue Internet gambling generates while controlling potential social risks with tight regulation.
Whether states choose to fold 'em or hold 'em when it comes to online gambling remains to be seen.
Alex Fitzsimmons is an intern in the public affairs division in NCSL's Washington D.C. office.