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Statement of Lisa S. Dean and J. Bradley JansenBefore the Subcommittee on CrimeHouse Judiciary CommitteeOn the Internet Gambling ProposalsNovember 29, 2001
Mr. Chairman, members of the Committee, thank you for allowingus the opportunity to present testimony on H.R. 556, the “UnlawfulInternet Gambling Funding Prohibition Act”; and H.R. 3215, the“Combating Illegal Gambling Reform and Modernization Act.” LisaDean is the Director, Center for Technology Policy, and Brad Jansen isthe Deputy Director, Center for Technology Policy, at the Free CongressFoundation, a Washington, DC based think-tank focusing on the cultureof American conservatism and our Constitutional liberties. The Free Congress Foundation strongly opposes H.R. 556 andH.R. 3215 because we believe they fly in the face of conservativeprinciples of federalism, individual responsibility, and limitedgovernment.As Free Congress has testified previously, we are deeplyconcerned about the speed with which gambling has spread from LasVegas across the country and into American living rooms. However, of much greater concern to us is the speed with which the long arm of thefederal government has spread from Washington, DC, into Americanliving rooms.While there are some who would oppose gambling at any cost,we recommend a more sober analysis of the cost-benefit ratio. In this
 
case, the costs clearly outweigh any alleged benefits. These billsrepresent a major step backward in the fight against the creepingassault on individual liberty. These proposals put several critical components of Americandemocracy at risk.First, this legislation makes a mockery of States’ rights and the Tenth Amendment to the United States Constitution. Throughout thehistory of this country, gambling has wisely been dealt with as a stateissue. Community standards differ from state to state, and from regionto region. Imposing a one-size-fits-all policy from on high inWashington, DC, is at best, misguided, and at worst, dangerous. Westrongly believe that gambling in cyberspace, like gambling in the realworld, should be dealt with at the state level, not at the federal level.In addition, this legislation represents a blatant disregard for theprinciples of federalism on which this country was founded. Nowhere isthat disregard more evident than in the way the bill deals withgambling on State lotteries. Taking the power away from states toregulate their own lotteries is an arrogant usurpation by the federalgovernment of one of the most fundamental rights of states—the rightto self-governance.Second, these legislative proposals represent the worst kind of government-enforced industrial policy. They essentially say that allInternet gambling should be prohibited—except gambling on horse
 
racing, dog racing, and similar activity. While some might suggest thatthe broad carve-outs contained in this legislation exist to preservestates’ rights, why have a bill at the federal level?We believe that allowing some gambling over the Internet whileoutlawing others is nothing more than the federal government pickingwinners and losers in the marketplace, and question where the federalgovernment gets the moral or legal authority to say that a bet on theKentucky Derby is acceptable, but a bet on the Superbowl should beoutlawed. H.R. 3125, the Combating Illegal Gambling Reform andModernization Act, carves out special exemptions for politically-favoredspecial interests such as horse racing and jai alai. Third, and perhaps most important, is the issue of governmentregulation of the Internet. H.R. 556, the Internet Gambling FundingProhibition Act, would effectively deputize credit card companies as BigBrother forcing them to monitor our online activities and report them tothe government. Giving the controversial Financial Action Task Forcemore legitimacy adds credibility to their campaign against privacy andfor higher taxes.We believe that the issue of Internet gambling is very much likethe issue of smoking. While many of us abhor smoking, would never doit, and teach our children to stay away from cigarettes at all costs, wedo not want the government to step in and tell us whether or not weare allowed to smoke. Because if the federal government can tell us
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