The federal government just can’t cope with Internet gambling.
In its latest misstep, the U.S. Justice Department has asked a Louisiana federal court to dismiss a lawsuit brought by casinocity.com that challenges the government’s crackdown the past year on advertising by Internet casinos.
If the government wins dismissal, it will only win postponement of an inevitable showdown in some other courtroom to resolve the question of whether and what sort of Internet gambling activity is illegal in the United States.
Uncle Sam’s main weapon in trying to squelch Internet gambling is a federal law from the 1960s that predates the Internet. Throw in the hopeless mash of 50 states’ statutes on the subject and you have the current environment of legal chaos.
Congress has debated cyber-gambling legislation for years, to no avail.
Congress similarly for years has debated proposed changes to the National Indian Gaming Regulatory Act.
Ambiguities, loopholes and other shortcomings in that 1988 law have likewise spawned a cottage industry of tribal gaming law litigators getting rich arguing over the fine print in that statutory pot of stew.
Don’t misunderstand this enthusiastic drubbing of Congress as an endorsement of Internet gambling. Hardly.
Some companies in the shadowy world of cyber-gambling have cleaned up their acts in recent years.
But in this corner of the newspaper it is still considered the height of lunacy to place a wager in cyberspace when the outcome is wholly in the hands of off-shore casino bosses and bookies unfettered by U.S. regulation and beyond the reach of U.S. law.
Besides that economic risk, gambling at home, probably alone, is unhealthy at best and akin to drinking alone. Not much good can come of it, with addiction the constant threat.
With all that said, it is also lunacy for Congress to continue pretending it can outlaw and police Internet gambling.
The industry’s Canadian-based Interactive Gaming Council estimates that thousands of cyber casinos last year raked in around $7.5 billion — half of it, at least, from Americans.
The cyber-gambling genie unfortunately has squirmed all the way out of the bottle and there’s no putting it back.
The only effective way to squeeze charlatans and bandits out of the business and protect consumers is to legalize the activity, then regulate it tightly and tax it heavily.
At last count, 77 nations were doing just that, and a lot of those legal Web sites are state-owned operations. Not all of those nations are Caribbean sand specks either. The list includes many of the world’s modern democracies, including Canada, Australia, the U.K. and most of the rest of the European Union. Even China and Russia are at the brink.
The United States cannot much longer stand alone against such a global tidal wave.
That, in effect, was what the World Trade Organization told the United States the other day when it ruled in favor of tiny Antigua and Barbuda in an Internet gambling restraint-of-trade case against the United States.
Antiguan authorities estimate their island nation has lost more than $90 million in taxes because of U.S. hurdles.
The United States can’t afford to thumb its nose at the international body and is expected to appeal.
That brings us back to the Louisiana Internet case.
In August, Casino City Inc., operator of casinocity.com, alleged that an ongoing Justice Department initiative aimed at stifling advertising by offshore gambling Web sites is a violation of commercial free speech.
In its recent motion filed in the U.S. District Court for the Middle District of Louisiana, government lawyers argued that Casino City had no standing to bring the action because it was not a named target of the crackdown.
Besides that, the government noted that the First Amendment’s free-speech guarantee does not extend to promoting illegal activity.
That brings us full circle, back to the absence of clear-cut federal law defining illegal Internet gambling.