10th Amendment and Internet Gambling Bill

[stormy455]

Mr. K,

While you may be correct on DOJ's potential interpretation of the wire act, H.R. 4411 does allow intrastate online gambling. It also goes on to say in Section 1084 subsection (c):

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For purposes of this subsection, the intermediate routing of electronic data constituting or containing all or part of a bet or wager, or all or part of information assisting in the placing of bets or wagers, shall not determine the location or locations in which a bet or wager is transmitted, initiated, received or otherwise made; or from or to which a bet or wager, or information assisting in the placing of bets or wagers, is transmitted.

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My interpretation of that paragraph (and I'm not a lawyer) is that it is the beginning and ending point of the transmission that counts - not the actual path. In other words, this legislation allows my state to authorize online gambling (totally within its borders) even if the Internet routes the wager outside the state and then back in. A state couldn't allow a wager to end up on a server in another state or foreign country however.

[LinusKS]

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Nothing in the bill prevents any state from licensing or authorizing intrastate internet gambling, should it decide to do so.

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FYP -- sort of. DoJ might even argue that intrastate gambling violates the Wire Act, as IP packets (an "instrumentality of commerce", for the legally inclined) from User A in a state to User B in the same state often travel outside that stuate en route to their destination. From what I heard, there is an interesting "portable gaming" initiative under study in Nevada, but I am not sure this area of the law is well defined, and certainly I don't think you have a black-and-white claim to truth on this.

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The Wire Act includes a "safe harbor" provision, allowing gambling where it's legal on both ends of the transaction.

Mr. Cohen argued the safe harbor provision at his trial. But, unfortunately, his business was only legal on the Antiguan side, or at least that's what the court ruled.

What states a bet travels through has nothing to do with it.

[Mr.K]

I hear what you are saying -- my point was merely that federal authority is triggered by a significant nexus with interstate commerce, and IP packets moving between states probably constitute such a nexus. That solves the 10th Amendment issue, which was my point.

Now, whether the federal government (via congress) decides to exercise that authority or not is a second, different question (which you have indicated has been answered in the negative). Just because Congress has not prohibited wagers of a certain variety doesn't mean it can't.

[LinusKS]

Well, maybe it depends on how you frame the issue.

The states have always regulated, licensed, etc. gambling within their own borders. The Feds have never tried to stop them from doing it. They've never said, "Nevada, you have to shut down your casinos," or tried to tell Utah they had to let them in.

I suspect, if the Feds did try to do it, they'd lose that fight in court.

Since they've never tried to do it, and since they're not trying to do it now, it doesn't really matter, though.

[chicagoY]

Walter Williams, as always, rules. I'd vote for him for President, or anything else, in two seconds.

[chicagoY]

On the contrary, of immense value as he is incredibly persuasive and explains well to the uninitiated the power hungry, anti-liberty behaviors of many a legislator.

[Wynton]

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I suspect, if the Feds did try to do it, they'd lose that fight in court.

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There is no question the federal government can regulate casinos via its commerce clause authority, just as it can regulate restaurants, hotels and other places of public accomodations.

[LinusKS]

I'm not enough of a constitutional lawyer to say whether you're wrong or right... but I'm surprised you say there's "no question" about it.

If the Feds tried to shut down the Vegas strip - say, by passing legislation outlawing gambling in Nevada - you don't think there'd be at least a question about whether they had that right? Because I'd be shocked if Nevada didn't go to court over it, and surprised if at least some constitutional scholars (and some Supreme Court Justices) didn't think the Feds were overstepping their bounds. Regulating gambling has always been part of the police powers of the states.

It's true the Feds have always traditionally won when they went up against states' rights advocates... but I don't know that means they'd automatically win this particular battle.

[Wynton]

Look, regulating an activity is one thing, and banning it is another. What I said was that there is no question that the federal government could invoke its commerce clause authority to regulate casinos.

Even under the commerce clause, the legislation needs to be somewhat rationally related to the legislative goal. Thus, an outright ban may be harder to justify.

[stormy455]

You are missing one word - "interstate". The constitution gives the Congress power to regulate interstate commerce. While the interpretation of what constitutes interstate commerce has been warped by the courts over the years, I also find it hard to believe that there is "no question" that the feds have the authority to regulate casinos. Now online gambling via offshore casinos is another matter - that IMO that is clearly interstate commerce.