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Betting on Republican Values

Internet gambling and the GOP campaign to protect us from freedom

Shikha Dalmia
July 20, 2006

It's a sign of a party's moral bankruptcy when it starts worrying about your moral purity instead of its own. That is the state of the Republican Party today.

Last week, House Republicans passed, by 317 to 93, a bill to ban internet gambling as part of their "American Values Agenda." After a decade of false starts, Virginia Republican, Bob Goodlatte, managed to brow-beat his colleagues into passing the bill in order — as he put it — to expunge the "smear" that Jack Abramoff had placed on the august body. Abramoff, of course, is the lobbyist who bribed powerful legislators to keep competitors out of the markets of the casino companies that he represented.

Promoting purity in government is a bit like promoting chastity in a prostitute. But Goodlatte might have at least deserved points for good intentions if he had proposed tougher penalties on corrupt public officials. Or meaningful and enforceable ethics rules for Congress. Or — heaven forbid — reducing government involvement in the gambling industry, the root cause of the Abramoff scandal. But instead of targeting his colleagues, Goodlatte is targeting ordinary Americans and their Internet pastimes.

His bill will extend to the internet the 1961 Wiretap Act that bars the gambling industry from accepting bets via the telephone. This, despite the fact that the Justice Department already interprets the act as doing precisely that, which is why no gambling outfit has dared to offer any form of online betting in the United States. The result? Americans who don't want to trudge to a casino to play a few hands of poker have turned to off-shore internet gambling sites.

But Goodlatte, who regards gambling as a sin and a scourge, wants to take even that option away from Americans. If approved by the Senate, not a remote possibility, his bill would ban U.S.-based Internet service providers from linking to gambling sites — a content restriction that might well not pass First Amendment scrutiny. It will also deputize private companies in the values crusade by barring financial institutions from processing on-line gambling transactions.

What's interesting is that just a few months prior to pushing this bill, Goodlatte introduced a resolution in the House to ignore the protests of other countries seeking a say in the governance of internet domain allocation through the United Nations. "We cannot allow repressive regimes around the world to have a role in setting the standards for the Internet," he inveighed. Yet now with no trace of irony he is using his puritan morals in setting the standards for the Internet. Indeed, there is not much difference between his bid to regulate internet providers according to his moral sensibilities — and the Chinese communist party's attempt to regulate Google according to its political sensibilities.

But the most troubling thing about the Goodlatte bill is that it contains a logic for ever more draconian controls that would restrict the ability of Americans' to conduct global commerce.

As it is, most Americans who wish to place wagers on off-shore gambling sites use their bank accounts, not their credit cards, because all American credit card companies have "voluntarily" agreed with the government's "request" to deny this service to their clients. Goodlatte's law would force banks to extend the same treatment to their clients.

But Samuel Vallandingham, spokesman for the Independent Bankers of America, notes that denying payments to off-shore gambling sites is not possible without monitoring all off-shore transactions. "This will drain finite resources currently engaged in complying with anti-terrorism, anti-money laundering regulations and the daily operation of our bank," he pleads. If Goodlatte has his way, it is entirely likely that all but the biggest banks will respond by banning all transactions involving offshore payments.

All of this might deter recreational gamblers, notes Michael Bolcerek, President of the Poker Players Alliance. However, serious gamblers — the real target of the bill — will simply open accounts in overseas banks, creating the condition for still further regulation in the future.

The Goodlatte bill is part of a sweeping package of proposals that seeks to legislate everything from the wording of the Pledge of Allegiance to the definition of marriage to cloning to information about anesthesia for the fetuses of women having abortions.

House Speaker Dennis Hastert, R-Illinois, maintains that this wholesale attempt at moral engineering is necessary to return America to its founding faith and protect the freedoms outlined by the Founding Fathers. Never mind that protecting the choices and economic freedoms of individuals from government attacks was a primary aim of the Constitution, particularly the Bill of Rights.

That the ruling party views an ever more expansive role for government in the lives of citizens to be a return to the country's founding faith is the most disturbing indication that American values may truly be under assault.

Shikha Dalmia is a senior policy analyst at Reason Foundation. An archive of her work is here and Reason's government reform research and commentary is here.


Shikha Dalmia is Senior Analyst


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