How Does Federal Government Influence The Internet Gambling

This ruling was later reversed by the U. S. Court of Appeals for the 8th Circuit, which stated that the activity concerned occurred off the reservation and thus was covered by state law. In a third lawsuit, brought by Wisconsin’s Attorney General, the U. S. District Court for the Western District of Wisconsin ruled that the Coeur d’Alene Tribe’s status as a sovereign nation exempts the tribe from Wisconsin state law. However, the Court did not extend the protection of sovereignty to the technology firms that assist the tribe in providing the Internet gambling site. 44

Given this and other experiences, several states have concluded that only the federal government has the potential to regulate or prohibit Internet gambling. In the words of Florida Attorney General Butterworth:

State law prohibits an individual in Florida from placing a bet or wager by wire communication or by use of the Internet. However… the burgeoning growth of the Internet and the difficulty in adopting and implementing durable and effective enforcement mechanisms, makes any effort to regulate the Internet’s use better suited to federal legislation, rather than a patchwork attempt by individual states. 45

To this end, the National Association of Attorneys General (NAAG) has called for an expansion in the language of the federal antiwagering statute to prohibit Internet gambling and for federal-state cooperation on this issue. 46 In the view of the state attorneys general, existing federal legislation and regulation falls short in several major areas, including the definition of what constitutes gambling, the need for the law to specifically cover more types of communications devices, and the ambiguity regarding the legality of receiving information on bets or wagers. 47

NAAG’s position on Internet gambling is a rare stance by the association in support of increased federal law enforcement and regulation and is a clear indication of the regulatory difficulties posed by Internet gambling. NAAG usually argues against federal intrusion into areas of traditional state responsibility, such as gambling. However, in a letter to William A. Bible, a member of this Commission and Chairman of the Subcommittee on Regulation, Enforcement and the Internet, James E. Doyle, the attorney general of Wisconsin, wrote that “NAAG has taken the unusual position that this activity must be prohibited by federal law, and that State regulation would be ineffective.” 48 In addressing the issue of enforceability of the federal prohibition, Doyle emphasized that “simply because an activity is difficult to control does not mean law enforcement should be forced to stick its head into the sand and act as though the issue does not exist.” 49

Federal Efforts
The federal government has been active in the area of Internet gambling. Thus far, DOJ has investigated and brought charges against 22 Internet gambling operators on charges of violating the Wire Communications Act. 50 All the defendants operated their businesses offshore and maintained that they were licensed by foreign governments. 51 However, the defendants are U. S. citizens, some of whom were living in the United States at the time of their arrests. 52 In a public statement following the charges, Attorney General Janet Renoannounced, “The Internet is not an electronic sanctuary for illegal betting. To Internet betting operators everywhere, we have a simple message: ‘You can’t hide online and you can’t hide offshore.” 53

44 Ibid. 45 Letter from Robert A. Butterworth, Attorney General of Florida, to The Honorable Steven A. Gellar, Representative, District 101 (Oct. 18, 1997) (on file with the state attorney general’s office). 46 Letter from James E. Doyle, Attorney General of Wisconsin and Immediate Past President, National Association of Attorneys General, to Commissioner William A. Bible, Chairman of the Subcommittee on Regulation, Enforcement and the Internet, National Gambling Impact Study Commission (Feb. 1, 1999) (on file with the attorney general’s office). 47 Ibid. 48 Doyle, supra note 88. 49 Doyle, supra note 88. 50 Dean Starkman, “U. S. Indicts 14 Over Gambling on the Internet,” Wall Street Journal, March 5, 1998, p. A8. 51 Ibid. 52 Starkman, supra note 83.