A legal opinion released by the Department of Justice legalizes some forms of non-sport, online gambling. The opinion was dated September 2011 but not released until right before Christmas.
The legal standard since the Internet’s explosive growth had been based on the Federal Wire Act of 1961. The act prohibited communication of bets across state lines.
The DOJ’s Office of Legal Counsel ruled that the Wire Act was directed at sports-related betting only, and thereby allowed the purchase of lottery tickets online and the use of out-of-state transaction processors.
The legal question was submitted by Illinois and New York, and since it related to state lotteries only, the breadth of the opinion in terms of other non-sports related gambling is not known at this time.
EthicsDaily.com contacted the Justice Department for clarification, and a public affairs spokeswoman said the “department declines comment beyond the opinion.”
Phil Blackwell, pastor of Chicago Temple (United Methodist Church) in Chicago, said the opinion legalized the lottery online, but it did not change the fact that the Illinois lottery is “cynical, short-sighted and cowardly.”
Blackwell characterized the thinking of Illinois lawmakers this way: “‘Since people are going to throw away their money on gambling anyway, let’s get as much of it as we can.’ Unlike levying a ‘sin tax’ on the sale of alcohol and cigarettes, by devising and promoting the lottery the state government is the pusher of the ‘sin’ itself, dedicated to producing more and bigger losers in order to make it pay.”
Blackwell told EthicsDaily.com that gambling need not always be construed as morally reprehensible, although he believes it often is.
Rather, Blackwell is concerned about the state’s unwillingness to pursue the “common good.”
“I think that it is immoral for the government systematically to take advantage of its citizens,” Blackwell said. “I think it is immoral for legislators to devise untenable budgets. I think it is immoral for lawmakers to shirk their responsibilities in order to get re-elected. But those deal with public issues, not personal ones.”
Illinois and New York are not the only states affected by this decision. Some states, including California and Iowa, have had bills sitting in legal limbo while awaiting clarification from the DOJ. The decision may encourage state legislatures to move forward with similar bills, but some questions remain.
Justice Department Journal reported that casino operators and representatives of the gambling industry will continue to push for federal legislation to allow other forms of online gaming, including video poker, which they say gives gamblers better odds.
Alan Feldman, a spokesperson for MGM Resorts International, told the journal that it’s necessary for Congress to get involved to avoid “a patchwork quilt of laws that are going to be very hard to decipher.”
Blackwell believes there will be massive growth in online and state-sanctioned gambling in the wake of the DOJ’s decision.
“What we’re going to see in Illinois will look more like a free-fall than a slippery slope,” Blackwell said. “There is a bill routinely placed before the state legislature that, in fact, would quadruple gambling in Illinois – adding four or five additional casinos, including one in Chicago, as well as gambling machines at the race tracks and State Fair.”
The money will ostensibly be used to fund state programs, including education. Many states have legalized gambling with promises that public education would be greatly enhanced with gambling revenue.
“When the legislature introduced the lottery in 1974, it sold the idea to the public by promising that the proceeds would pay for equal public education for all children in Illinois,” Blackwell said. “The lottery proved very quickly that it could not produce the promised funds, while at the same time the legislators, playing their own shell game, moved the existing funds for education to other parts of the budget, leaving spending on education stagnant.”
In addition to underperformance and diverted funds, critics of the opinion believe the poor will be disproportionately hurt.
“Most of all, bringing Internet gambling to America would hurt the poor, who are most affected when people lose money in government-approved games of chance such as state lotteries or casinos,” read a Christian Science Monitor editorial. “In effect, President Obama and his appointed Justice officials have bowed to political pressure from states that seek a new source of revenue in Internet gambling rather than taking the difficult decisions to raise taxes or cut spending.”
Blackwell pointed out that gambling advertising in Illinois has disproportionately targeted poor neighborhoods and areas with people on fixed incomes.
“Instead of honestly calculating the real costs of education, public services and infrastructure repairs and then calling citizens to be responsible through a fair tax structure, legislators are shrugging off the burden onto a few, and often those who are least able to shoulder it,” Blackwell said.
Robert Parham, executive editor of EthicsDaily.com and executive director of its parent organization, the Baptist Center for Ethics, tweeted three times about the DOJ’s announcement.
“Obama administration gives Christmas gift to online gambling industry,” tweeted Parham, who later wondered via Twitter why the DOJ waited until Christmas to announce a decision made in September.
He also referred to online gambling as predatory taxation.