Editorial: America the Labyrinthine

5 November 2007

Yet another state law has surfaced with language that looks like it will make ordinary online bettors into felons. Massachusetts is considering a bill to criminalize that wicked online gambling. (And this is part of a bill in which the Bay State is also considering opening up two land-based casinos. Pure coincidence. Honest to God.)

Are midnight raids on the menu? Will the people of Boston need to post lookouts before going online and making their NFL picks from now on?

The confusion is understandable -- in fact it's an accurate read of the situation. Twelve years after the opening of the first Internet betting operations, the state of American gambling laws continues to be near-chaotic.

To begin with, only nine states even mention the Internet in connection with their gambling laws at all -- Massachusetts would be the tenth if the proposed law is enacted.

(Michigan, by the way, outlawed Internet gambling by adding a rider to its gambling laws in 1999 forbidding use of the Internet to break those laws. But in the next year, that section was repealed and replaced with another that mentioned kiddie porn but no gambling. Nevertheless, Michigan is generally counted among those states that forbid I-gaming. Perhaps, as on Christmas, it's the thought that counts.)

Most of the rest assert (erroneously in my view) that existing laws cover all Internet gambling operations. Sixteen of these, and the District of Columbia, do not have any definition of "gambling," Internet or otherwise, on their statute books at all.

Supposedly three states -- Louisiana, Washington and now, prospectively, Massachusetts -- not only outlaw Internet gambling operations, but threaten to punish the gambler with the same penalty as the operator -- that is, with felony jail time and fines. But is that so? Is that what the lawmakers meant to do?

Everyone agrees that every law should be written so that people understand what they can and cannot do. But it is surprisingly hard to write even a simple law clearly. Even the Ten Commandments have been subject to endless interpretation and commentary. Let's examine the wording of the anti-gambling laws, and see if a little sunlight and common sense won’t help.


Section 14:90.3 (B) of the Louisiana Revised Statutes forbids "the intentional conducting, or directly assisting in the conducting as a business of any game, contest, lottery, or contrivance whereby a person risks the loss of anything of value in order to realize a profit when accessing the Internet, World Wide Web, or any part thereof by way of any computer, computer system, computer network, computer software, or any server using a computer or the Internet."

While this is bad news for the individuals recently apprehended in connection with the Tiny Tuna Web page, there is nothing here that threatens the individual gambler. In order to violate this law you must be conducting gambling as a business, which the individual player by definition does not do.


Revised Code of Washington Section 9.46.240 reads: "Whoever knowingly transmits or receives gambling information by telephone, telegraph, radio, semaphore, the Internet, a telecommunications transmission system, or similar means, or knowingly installs or maintains equipment for the transmission or receipt of gambling information shall be guilty of a class C felony . . . "

However, the term "gambling information" is previously defined in Section 9.46.0245 as " . . . any wager made in the course of and any information intended to be used for professional gambling. In the application of this definition, information as to wagers, betting odds and changes in betting odds shall be presumed to be intended for use in professional gambling."

Professional gambling is "Acting other than as a player or in the manner authorized by this chapter, the person knowingly engages in conduct which materially aids any form of gambling activity . . . "

And finally, "player" is defined in Section 9.46.0265 as "natural person who engages, on equal terms with the other participants, and solely as a contestant or bettor, in any form of gambling in which no person may receive or become entitled to receive any profit therefrom other than personal gambling winnings, and without otherwise rendering any material assistance to the establishment, conduct or operation of a particular gambling activity."

All of the above would seem to insulate individual gamblers from any liability. In the grand American tradition, however, the lawgivers of Washington succumbed to the temptation to read a vindictive little sermon into the statute books, and so fell into absurdity. For they endeth the lesson with further exceptions to the exception: the Player category does not cover "a person who pays a fee or "vigorish" enabling him or her to place a wager with a bookmaker, or pays a fee other than as authorized by this chapter to participate in a card game, contest of chance, lottery, or gambling activity . . . "

Which is ridiculous on several levels. First, anyone should know that nobody pays vig up front, so that particular prohibition is meaningless. Second, the line about paying to participate either completely removes the player exception (in which case, why did they write it in the first place?) or is an attempt to snag all the quasi-gambling operations such as subscription pages, as well. Like so much state legislation, bad writing has been piled on top of good so that no one can tell.

On the strength of this, however, the Washington State Gambling Commission placed the following on its Web page under the FAQ section: "Player gamblers, whether at poker slots or other gambling games, run the risk of felony conviction." Supposedly, if a player is named in records seized from an online gambling raid, he will be sent a warning by the commission, but will be subject to felony prosecution if it happens again.

Which is preposterous. How many people give their right names to online bookies? Precisely because most credit cards have been chased from the field, the many operations use e-wallets and debit cards now, even transfers. How many of those records are complete enough to trace back to John Doe? And, of course, how is the Washington State Gambling Commission going to get hold of them in the first place, since almost all of them are offshore and out of reach of even the FBI?

Even the Washington State Gambling Commission has had to acknowledge that "enforcement is focused on larger, higher level Internet gambling activities," and "there is not an active campaign against regular players." How could there be? Barring a lucky break, how would they ever find out?

The threat was genuinely made, but that is the end of its authenticity. It is essentially a hollow one.


Massachusetts is in the same boat.

Massachusetts law prohibits anyone from gambling in a public place or a private place on which he is trespassing. MGL 271.2 through 271.5 opens for prosecution anyone who wins at prohibited gambling (271.1). If you are found in a "common gaming house," whatever that is, you can be busted ( 271.5). But all of these are misdemeanors.

Technically, the proposed section, 12B (15)(h)(2)(I), would in fact expose an individual gambler to felony prosecution. But like Washington, Massachusetts has no way to detect or punish the individual online gambler on anything like a worthwhile basis. The operator is the obvious target here.

This is the sort of thing that really worries people who give a damn about the rule of law. When the authorities huff and puff and pretend to powers they don't have, sooner or later somebody is going to call their bluff. And when that happens, respect for the law goes down all across the board. General Douglas McArthur said it best: "Never give an order that you know won't be obeyed."

Mr. Owens is a lawyer in Sacramento, Calif., specializing in Internet gambling law. Released in 2005, he coauthored "Internet Gaming Law" with Professor I. Nelson Rose, America's senior authority on gambling.