Freedom Works libertarian federal online gambling ban

FreedomWorks was one of several US libertarian groups that signed off on a congressional letter opposing a federal online gambling ban.

There are very few federal laws that libertarians won’t oppose, so perhaps it shouldn’t come as a surprise that groups of that leaning have generally come out against a nationwide ban of online gambling. But a coalition of libertarian groups have had particularly harsh words for the proposed ban, saying it could set a dangerous precedent for how the Internet is regulated.

In a letter signed off on by ten libertarian-leaning groups, the bill was called “an inappropriate and unnecessary use of federal powers that infringes on the rights of individuals and states.” That letter was sent to the leaders of both the House and Senate Judiciary Committees earlier this week.

Ban Would Hurt Consumers

Like many other groups that have come out against the Restoration of America’s Wire Act (also known as H.R. 4301), the coalition argued that a ban would cause more harm than good for consumers.

“As we have seen in the past, a ban will not stop online gambling,” they wrote. “Prohibiting states from legalizing and regulating the practice only ensures that it will be pushed back into the shadows where crime can flourish with little oversight. In this black market, where virtually all sites are operated from abroad, consumers have little to no protection from predatory behavior.”

The groups that signed off on the letter also echoed statements made by organizations such as the National Council of Legislators from Gaming States, who said that the ban would represent federal overreach in areas traditionally left to the states. In addition, they questioned whether the government should regulate the Internet so heavily.

“By banning a select form of Internet commerce, the federal government is setting a troubling precedent and providing fodder to those who would like to see increased Internet regulation in the future,” the letter stated.

Picking Winners and Losers

Since the law would include carve-outs for some horse racing and lottery products, the signatories also claimed that the ban was not a fair application of government power.

“This amounts to the federal government picking winners and losers – choosing selected industries or private-sector businesses to succeed at the expense of others, which is at odds with free-market competition,” they wrote.

The groups signing the letter included FreedomWorks, the Institute for Liberty, the Taxpayer Protection Alliance and the Alliance for Freedom.

Report Misrepresented by Both Sides, Author Says

The letter comes at a time when both sides of the online gambling debate are working hard to make their case. So hard, in fact, that the authors of one major report say both factions have misused the information they provided last week.

That report – titled “Jackpot! Money Laundering Through Online Gambling” was released by McAfee, and both sides immediately tried to use its conclusions to aid their cause.

Sheldon Adelson’s Coalition to Stop Internet Gaming said that the report proved that Internet gambling will lead to money laundering efforts from criminals and terrorists. Meanwhile, the Coalition for Consumer and Online Protection, which opposes the ban, said that it showed that such schemes could only be stopped by regulating the industry rather than outlawing it.

According to report author Raj Samani, however, his paper suggests neither of these things.

“For every licensed online gambling site, there could be up to nine unlicensed online gambling sites,” Samani wrote, suggesting that what America does in regards to Internet gambling would have only a very minor effect on the issue of money laundering.