In politics, there is an often-used phrase called “Bootleggers and Baptists.” The term came to pass when economist and historian Bruce Yandle noticed that illegal alcohol bootleggers would finance efforts by religious organizations to limit alcohol sales. The harder it was to buy legal booze, the more money the bootleggers made. Religious leaders were happy to limit the availability of alcohol and bootleggers were smiling all the way to the bank.
We are seeing a similar pattern play out in Washington where Las Vegas casino owners have linked hands with religious groups and some conservative politicians to pass legislation that would prohibit states from legalizing online gaming. In the eyes of the casino owners, the harder it is to find a legal card game, the more people will fly to Las Vegas to play.
New Jersey is among a small group of states that allows its citizens to gamble on the Internet. There are strict controls to ensure minors cannot gamble and that participants must live in the state. Other states allow similar activities and still others allow the sale of lottery tickets online.
Sheldon Adelson, the CEO of the Sands Casino empire, is financing an effort to overturn state laws that allow for online gambling or the sale of online lottery tickets. Sen. Lindsey Graham (R-SC) and Rep. Jason Chaffetz (R-UT) are the primary sponsors of the Restoration of America’s Wire Act (RAWA), which was drafted by Adelson’s personal D.C. lobbyist. Mr. Graham argues that South Carolinians don’t like gambling and don’t want to see it expanded, warning that “virtually any cell phone or computer in South Carolina could become a video poker machine.” But no one is threatening to foist gambling upon states that don’t want it.
The real issue at hand is not gambling per se. It is the Constitution, the power of the federal government, and the proper role of states in our federalist system. That’s why a coalition of more than 10 free market organizations led by the Center for Freedom & Prosperity just sent a letter to Rep. Bob Goodlatte, Chairman of the House Judiciary Committee where RAWA is being considered, asking him to stand strong in defense of federalist principles against special interest lobbying.
The Founding Fathers included the Tenth Amendment in the Bill of Rights to limit the power of the federal government from overtaking the jurisdiction of the states. Gambling laws have always been governed by the states. Hawaii and Utah, for instance, do not allow gambling. Other states have lotteries, casinos, horse racing, and even Jai alai. Sen. Graham’s South Carolina once had poker machines but voters decided they had enough and removed them. That is exactly how the system should work.
Likewise, if New Jersey wants to allow online gambling for their citizens, it is not up to the federal government to decide otherwise. Under our constitutional system, residents of New Jersey who want to see the law changed should follow South Carolina’s lead and lobby their state government in Trenton, not Washington, D.C. for change. Mr. Adelson, however, has chosen to go to Washington.
After giving hundreds of millions of dollars to politicians, most to GOP candidates, he is looking for his friends in Congress to trample on the power of the states to set their own gaming rules in order to pad his corporate profits. This power should concern states that currently prohibit gambling just the same as it does those which allow it, as Washington’s preferences are subject to change at any time. After all, a federal government strong enough to take away gaming from a state is strong enough also to impose it on a state.