Casinos.co.uk: Casino News Archive
Thursday 7th July 2005
Legalization Attempts and Internet Gambling
By Lawerence G. Walters, Esq.
The legal landscape of Internet gambling in the United States is ever changing, making it difficult for both the industry and the player to keep up with the pace of the law as it evolves, and the confusion that often arises at the legislative level. The State of Nevada was first to pass an Internet gambling bill in 2001, which created a scheme for regulating some forms of online gambling. However, the language of that bill contained a provision that conditioned the state’s establishment of Internet gambling on approval by the federal government. Unfortunately, the U.S. Department of Justice never signed off on the concept and even notified the State of Nevada that proceeding with legalization of Internet gambling would violate the federal Wire Act. Nevertheless, the State of Nevada is again seeking to bring its gambling industry into the 21st century by allowing limited wireless gaming in licensed casinos throughout the state with the approval of AB 471. The bill, which would allow certain casino patrons of to use PDA’s or similar devices for gambling purposes while roaming its properties, passed the Senate on a 20 to 1 vote, and was signed into law on June 7, 2005. Decisions must still be made on how to regulate this activity by the Nevada Gaming Commission. Continued efforts by the State of Nevada to expand its popular legalized gambling into the Internet market, even on a limited basis, will break down barriers and preconceived taboos on Internet gambling, ultimately allowing lawmakers and citizens to get slowly accustomed to the idea. Thus far, the Department of Justice has not commented on this new legislation, and its blessing may be determinative of the program’s ultimate success.
Given the uncertain of the state of the law, coupled with the recent WTO decision, many states are left unclear as to which way the regulatory pendulum will swing, and have taken on a “wait and see” attitude regarding any new legislation. The individual states are highly influenced by the federal government, which continues to maintain a prohibitionist stance on Internet gambling. For example, the State of North Dakota recently considered passing a bill intending to legalize Internet poker activities, but before the Senate Judiciary Committee could vote on the bill, the Department of Justice sent a letter to the Attorney General of North Dakota stating that the proposed bill would violate federal gambling laws. As a result of this warning, the North Dakota Senate voted down the bill by a 43 to 3 margin, although the measure had previously passed the North Dakota House of Representatives. The Department of Justice has a history of objecting to any legalization efforts, and has shot down several such attempts in the last decade. Notably, prohibition efforts can also come from the state level. For example, a coalition of 29 attorneys general has recently organized in an effort to oppose any attempt to allow Internet gambling through international trade agreements, in reaction to the WTO appeals body ruling.
A recent U.S. Supreme Court decision may have a favorable impact on the Internet gambling industry, but a celebration may be a few years off. In the combined cases of Granholm v. Herald and Swedenburg v. Kelly, 125 S.Ct. 1885, 2005 WL 1130571 (U.S. 2005), the Court held that individual states cannot discriminate against out of state wineries by prohibiting Internet sale of wine from outside of the state, while allowing in state wineries to sell their products so long as they did not ship them across state borders. In a 5 to 4 decision, the High Court Justices said that if a state allows in-state wineries to ship directly to residents, then the Commerce Clause of the U.S. Constitution requires out-of-state vintners to be treated equally. Nevertheless, in light of the case, individual states may not be able to prohibit out-of-state companies from offering goods or services – possibly even gambling services – to their residents without violating of the Commerce Clause. The full impact of the ruling is not yet known, given its recent issuance. This author has been arguing the potential importance of the commerce clause for years, and this case has stirred up a renewed interest.
Lawrence G. Walters, Esq., is a partner in the national law firm of Weston Garrou & DeWitt, with offices in Orlando, Los Angeles, and San Diego. Mr. Walters represents clients involved in all aspects of online gaming operations. Nothing in this article constitutes legal advice. Please contact your personal attorney with specific legal questions. Mr. Walters can be reached at Larry@LawrenceWalters.com, through his website: www.GameAttorneys.com
Source:OnlineCasinoNews
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