House of Cards®


Sense and Nonsense from Congress by Professor I Nelson Rose

Gambling and the Law®:

Sense and Nonsense from Congress

“Congress is so strange. A man gets up to speak and says nothing.  Nobody listens—and then everybody disagrees.”

            Boris Marshalov

            It's generally known that Congress is about as popular today as cockroaches.

            That is actually unfair to cockroaches.  In a head to head survey conducted by Public Policy Polling, cockroaches had a more favorable rating than Congress.  And that was in January 2013.

            By June, a different polling organization, Gallup, found congressional approval had gone down even further, to a historic low of 10 percent.  This is not only the worst rating ever for the legislative branch of the federal government, it is the lowest approval rating for any institution of any kind since Gallup first started taking surveys of the public approval of Congress 40 year ago.

            And this was before the Republicans in Congress shut down the federal government and brought the U.S. to the brink of defaulting on its national debt.

            It's not just the misuse by the GOP of the filibuster in the Senate or the repeated attempts at economic extortion by the Tea Party crackpots in the House of Representatives.  On the few days that Congress actually meets to work in D.C., the politicians seem to have no connection with the real world.  The Republicans in the House orchestrate televised “investigations,” on burning non-issues, like Benghazi, or hold hearings on abortion and women’s health with no women testifying. 

            The most recent example was a hearing on Internet gambling, with only opponents, and one guy who wants to sell something, testifying.

            Worse, the few members of Congress who actually showed up for this hearing on online gaming seemed to not know what they were talking about. 

            The new Democratic U.S. Senator from Hawaii, Brian Schatz, might be forgiven for his comments.  He was only appointed to Congress at the end of December and is the second youngest member of the Senate.  But somebody, like an aide or a senior Senator, should have told him that, no, the federal government is not going to overrule Hawaii’s complete prohibition on commercial gambling.  It is impossible to imagine Congress imposing the same policies toward gaming on Nevada and Utah, or Hawaii.

            But the Republican U.S. Senator from Nevada, Dean Heller, has no excuse.  He is the ranking member of the committee hearing the testimony.  And coming from Nevada, he had to know that the main point he kept reiterating was simply wrong.  Many of the members of Congress, but especially Heller, repeatedly blamed President Obama’s Department of Justice for “unilaterally” overturning decades of established law.

            The law in question is the federal Wire Act.  And the position that got overturned was that of the Department of Justice’s Criminal Division, which used to hold that the Wire Act covered all forms of gambling.  Heller is not a lawyer, but had he bothered to ask one, he would have been told that the DOJ’s position had been criticized for years, and had been rejected by federal courts, including the only U.S. Courts of Appeals to consider the issue.  Even the DOJ does not have the right to reject published opinions from these Courts, second only to the U.S. Supreme Court in their power to interpret federal law.

            Missouri Senator Claire McCaskill (D.-Mo.) started things off by declaring that Congress was concerned that online gaming was being used by “terrorists looking to launder money to fund their activities.”  This is known as a canard, defined as “a false or unfounded report or story; especially: a fabricated report; a groundless rumor or belief.”  There is no evidence that Islamist fundamentalists are sitting around plotting how to blow up airplanes, while they play Texas Hold ‘em.

            The hearing was by the Senate Subcommittee on Consumer Protection, Product Safety, and Insurance.  You knew how things would turn out when you read the title of the hearing: “The Expansion of Internet Gambling: Assessing Consumer Protection Concerns.”  If that weren’t enough, here’s who they chose as witnesses:

!          Chuck Canterbury, National President of the Fraternal Order of Police.  The highlight of his testimony:  “We know this for certain, organized crime is using offshore online operations to launder their profits.”  Really?  Is that offshore online gaming operations?  Name one.

!          Matt Smith, President of Catholic Advocate, who accused “large states” of lobbying to get the DOJ to change its position on the Wire Act.  Assuming a lobbyist for a state could do that and not go to prison, exactly which states are those?  California?  Texas?  Florida?  He wants the federal government to overrule the states and crackdown on legal gambling.  He’s only about 60 years too late, since every state except Hawaii and Utah have large-scale commercial casinos, tracks or lotteries; or all three.

!          Jack Blum, a lawyer specializing in money laundering cases, began his testimony with, “Personally, I think gambling is dumb and I learned early on that the house always wins.”  I have always loved that canard.  If the house always wins, why are there repeat customers?

!          Thomas Grissen, whose company makes bio-identification for online applications.  Grissen started by saying he is neutral on online gaming.

            So, what new facts did the Subcommittee discover from these experts?  I bet you did not know that not just terrorists, but drug dealers, pornographers and human traffickers “could be” using Internet gambling to launder money.  Exactly how are all these terrible human beings utilizing online gaming?  Blum, the money-laundering expert, explained how Al Capone and Meyer Lansky bought casinos and race tracks to launder their money.  It’s always good to throw in organized crime, when you want to scare people.

            But I’ve always wondered why criminals need to use gambling to finance their other crimes.  Doesn’t dealing in illegal drugs and prostitution produce enough money?

            Meanwhile, members of Congress from states with legal gambling and those without, conservative Republicans and liberal Democrats, U.S. Senators and Representatives who know the law and those who don’t – all have plans for Internet poker.  They all want it done their own way.

            This would cause a political problem, if there were any chance Congress might actually pass a law dealing with online gaming.  But since our federal lawmakers have literally not passed any new substantive law since the Republicans took over the House in January 2011, that’s not likely.

            Congress has passed some bills: naming post offices, appointing people to commissions, while fighting over money.  Democrats, with the help of a handful of Republicans, have managed to overcome Tea Party resistance and approve extending the Federal Aviation Administration and renew the Violence Against Women Act.  But, except for amending the patent laws, no new substantive proposal has gotten through both houses to be signed by the president.

            So, there is virtually no chance that the only new substantive law would be a bill legalizing Internet poker, or outlawing it.

            The states, including governors, state legislators, and state lotteries, have woken up and are actively lobbying Congress to keep its hands off legal gaming.  The argument that the states can’t handle Internet gaming falls in the face of a century of states-only regulation of alcoholic beverages and gambling.  And the idea, advanced again at this hearing, that a completely new federal gaming commission would do better than state regulatory agencies with decades of experience, is just plain silly.

            The good news is that all this nonsense is only a waste of time.  It won’t produce an actual new federal statute.

            This may be the only time that it is actually good for the country that Congress never passes any new laws.


© 2014, I. Nelson Rose.  Prof. Rose is recognized as one of the world’s leading experts on gambling law, and is a consultant and expert witness for governments, industry and players.  His latest books, Internet Gaming Law (1st and 2nd editions), Blackjack and the Law, Gaming Law: Cases and Materials and Gaming Law in a Nutshell are available through his website,

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