Eighty years ago, New York Mayor Fiorello LaGuardia took a sledgehammer to slot machines in order to prove a point. As David Blankenhorn, president of the Institute for American Values, wrote in the New York Daily News, his honor was upset not because people were using slot machines that, at the time, were illegal, but because “he believed they were illegal because they were wrong.”
The machines were built in such a way that winning was extremely rare, and LaGuardia believed poor people, in particular, were being cheated by the machines’ allure.
Were he alive today, LaGuardia would find it much harder to smash smartphones and iPads, which soon may make Americans more vulnerable than ever to forms of gambling that are more alluring and destructive than ever. It’s time to draw clear boundaries to keep gambling from spreading.
In 1961, Congress passed the Wire Act, which outlawed gambling over interstate telecommunication lines, or on lines that crossed international borders. Years later, when the Internet appeared, the U.S. Department of Justice interpreted the act to apply to Internet gambling as well. But in 2011, when New York and Illinois asked the Obama administration to clarify the matter, Attorney General Eric Holder’s Justice Department abruptly changed course, deciding the act no longer applied to the Internet.
This change, made without any input from Congress or the public, suddenly gave states the ability to legalize Internet gambling in all its forms. And while the few states that have done this have limited sanctioned online gambling to state residents only, anyone who understands the nature of the Internet and the history of the gambling industry knows this is just a start.
Once serious gambling is available on personal devices, the gambling industry stands to reap billions while gambling addictions spread. Even casual gamblers can be lured into spending large sums of money on something that offers no return.
The London research company H2Gambling Capital estimates that the first year alone of nationwide Internet gambling in the United States would net $4.3 billion and grow to $9.6 billion by the fifth year. Worldwide, online gambling already is on its way to becoming a $100 billion industry.
In March, Rep. Jason Chaffetz, R-Utah, introduced the bipartisan H.R. 4301, Restoration of America’s Wire Act, to clarify the intent of the Wire Act of 1961 and restore its original interpretation. A companion bill in the Senate is co-sponsored by Sen. Lindsey Graham, R-S.C., and Diane Feinstein, D-Calif.
Importantly, the bill would protect Utah and Hawaii, the only two states left that outlaw gambling in all its forms.
That is no small thing. As gambling has saturated the other 48 states of our nation, it has increasingly made their budgets dependent on lotteries and other games of chance. States that choose to refrain from such activities need the ability to safeguard their right to do so.
All those years ago, LaGuardia understood why it was important to resist an industry that lures people to spend hard-earned money on false hopes. Gambling produces no value. Its social costs greatly outweigh any perceived benefits. It takes money from other forms of recreation, as well as from investments in things of value.
The bipartisan bills introduced by Chaffetz and by Graham and Feinstein draw an important line that would keep gambling from spreading to places where it is not welcome. We support this legislation.