Cyberspace Gaming Law

11 June 1997
By Dennis B. Collins, Ph.D.

In the United States, we have 50 states and several territorial "protectorates" such as Puerto Rico and the U.S. Virgin Islands. Each state is divided into Counties and within each County may be located several cities. There are perhaps 30,000 individual political jurisdictions, each with an ability to outlaw and prohibit gaming in any form and Internet gambling in particular. Worldwide, one can only guess at how many hundred thousand potentates exist.

History has clearly shown that a government's ability to make a law does not ensure that it will be effective. Indeed, to the extent that governments pass weak laws that are generally disregarded, governments grip on those governed slips and is diminished. It is counter-productive to attempt to regulate something over which you lack the effective means to control.

The more a government passes laws that are disregarded and circumvented, the more citizens will come to believe that if they can ignore one law, they may as well ignore the next. Soon, the third law is ignored and the government is on its way to a general failure. It becomes easy for citizens to begin to pick and choose the laws they will obey. Internet gaming is providing a pristine example of this phenomenon.

The Internet is providing governments all over the world with a difficult problem. In effect, the fact of the Internet seems to challenge the central thesis of government. A central theme of government is that people want and need to be governed. Government assumes a role as parent. Governments attempting to regulate Cyberspace are discovering unruly children indeed. The denizens of Cyberspace tend to be some of the brightest and best educated people on the planet. They need the least amount of government/parental control. If we view government as a product, the citizens of Cyberspace don't like the role of consumer of that peculiar commodity.

Today, in the United States (and elsewhere), state Attorneys General and politicians of every imaginable stripe are scrambling to regulate Cyberspace. Collectively, they will fail because they do not fundamentally understand what they attempt to regulate. Additionally, they fail to recognize that what is lawful in one political jurisdiction is unlawful in another, for very good reasons. Reasonable people differ in opinion and they ways they like to be governed.

In the days BC (Before Cyberspace), commercial concerns could go jurisdiction shopping. They could ascertain the type of business activity they wished to engage in and simply locate a city, state or country where it is lawful. The Internet and Cyberspace just makes this much easier. The most fundamental change has been for the consumer. Businesses could always go jurisdiction shopping. Now their customers can as well. If it's unlawful to gamble in one place, you can surely find somewhere in Cyberspace that will allow it.

Cyberspace unintentionally makes more traditional government authority obsolescent. Government is in the business of providing "service" and sadly, it has also assumed the role of being the "Mind Police". Government (politicians) tells you what is good for you and what is bad for you. It tells you how to think. The Internet combats this notion and allows free thinkers to congregate. Unintentional as it may be Cyberspace is a direct threat to the authority of the stateā€¦but which one?

In law, there is the term "Venue". In simple terms, it means which governmental jurisdiction's rules will apply to the case at hand. Whose law governs the situation? If you engage in casino games of chance (gaming) via the Internet, where does the gambling occur? Does it occur where the licensee's computer is physically located? Does it occur where the licensees issuing government resides or perhaps it occurs where the customer is. Realize, of course, that you can easily have individuals playing from fifty countries simultaneously. By traditional thinking and traditional rules of Jurisprudence, it's unthinkable to have fifty simultaneous venues.

In California, where I live, we have many forms of gambling. Here, gambling is not a moral issue. It is really an issue of income to government. The State of California is the biggest gaming operator there is. They run the State Lottery. This is true of many other States and venues. California politicians are well aware of the fact that many people travel a short distance to Nevada for a dramatically greater gambling experience. For that matter, people come from all over the world to Nevada for exactly that reason. In that instance, the person's home jurisdiction does not control their actions. If their citizens travel, the local rules prevail. In Cyberspace, the only thing that has changed is the mode of travel.

Attorney's General and lawmakers of many colors attempt to ban, regulate or outlaw Internet gambling. They are all doomed to fail. Government(s) as the biggest game operators have lost any moral imperative they may have had. The only issue is revenue from taxation and/or licensure. There is no hue and cry from the people for protection from unscrupulous casino operators. Absent that demand, we can only conclude that such regulators are little more than political prostitutes in search of headlines.