The Internet Gambling Prohibition Act: Congressional Defiance of the First Amendment Right to Free Press
By Ken Wilson
Kenneth-Wilson@uiowa.edu
Cyberspace Law Seminar
The gambling industry in the United States is growing daily. >From Bingo to lotto to sports betting, gambling is increasingly becoming a part of our lives. An emerging aspect of gambling is Internet gambling. Congress, through the Internet Gambling Prohibition Act, is attempting to outlaw Internet gambling. Unfortunately, the means by which they wish to outlaw Internet gambling are unconstitutional. In this paper, the Internet Gambling Prohibition Act will be analyzed as a limitation on the First Amendment right of Free Speech and Freedom of the Press.
Legalized gambling made the small desert town of Las Vegas, Nevada into one of the most recognized and glamorous places in the world. It attracts millions of visitors each year with its lure of economic freedom, cheap buffets, and elaborate shows. Gambling, however, is not limited to Nevada. Gambling, in some form, is legal in 48 states and the District of Columbia. Bingo Parlors, state lotteries, Indian Casinos, and horseracing tracks are popping up all over the country. Illinois, Iowa, Mississippi, Louisiana, Missouri, and Indiana have legalized riverboat casinos, and some 60 riverboats are now in operation in the United States.
In 1997, Americans spent $586 billion on legalized gambling. That is more than was spent on cars, clothes, movies, and food combined. The gambling industry grossed $48 billion in profit from legalized gambling in 1997.
As of May 1998, there are approximately 90 online casinos, 53 sports betting parlors, 39 lotteries, and 8 Bingo games online. The number of these sites will undoubtedly increase without government regulation. Additionally, Australia is contemplating legalizing Internet gambling. One territory, Queensland, already has taken steps toward legalization. If Australia does legalize gambling, then Internet gambling sites would undoubtedly become firmly entrenched on the Internet.
Congressional estimates say that Internet gambling revenues could reach $10 billion by 2000. Private experts estimate Internet gambling revenues will reach close to $60 billion. Currently, $600 million in sports betting alone was wagered in 1997. If other countries, such as Australia, legalize Internet gambling, the undoubted surge in Internet gambling would dwarf estimates. The appearance of propriety and authorization of Internet gambling by a major government will only spur Internet gambling on.
The Internet was not initially developed as a means of mass media and commerce. The Advanced Research Project Agency Network, or ARPANET, was created in 1969. The ARPANET was a network of interconnected computers used by the military, defense contractors, and universities. The purpose of the network was to provide a means of communication between participants that would still function if one section of the network were incapacitated by war. ARPANET was used for communication of defense-related research and development. Although ARPANET no longer exists, it was the basis for the development of what we now know as the Internet.
The Internet is a network of computers linked together via high-speed communications lines, which together, act as one unit. From any one of the millions of access points to the Internet, a user can access all of the information available on more than 10 million host computers. The Internet enables millions of people to communicate freely with each other and exchange vast amounts of information, for little or no cost.
In 1996, there were approximately 40 million people using the Internet worldwide. Today, there are currently 100 million users all over the world. People access the Internet in various ways. The most common is through Internet Service Providers (ISPs). ISPs, such as America Online, the Microsoft Network, and Prodigy provide dial-up computer access to their own proprietary computer networks and access to the rest of the Internet. In addition to ISPs, almost all universities provide access for students and staff, and many corporations provide access to the Internet for their employees as well. Public libraries are also using the Internet, providing free access to patrons.
A relatively new development in Internet access is pay-for-play shops. These shops provide access to the Internet for a small fee using their computers, along with other services. One example would be computer coffee shops, where one can browse the Internet and drink coffee. Access to the Internet is growing. Almost every person in the United States can get access to the Internet in some form or another. Whether through work, school, or a public library, the Internet is emerging as a dominant media for the twenty-first century.
The Internet contains five main types of media/information that are accessed by users. The first, and most common is e-mail. E-mail is electronic messaging sent over the Internet from one user to another. The availability of e-mail is great. There have been estimates that over 2 billion e-mail messages are transmitted over the Internet every day. Compare that to 566 million pieces of mail handled by the U.S. Postal Service.
The second type of media is e-mail lists, also known as "listservs." A listserv is an automatic e-mail communications system that broadcasts e-mail messages to hundreds or thousands of subscribers. A user will send a message to the automatic listserv software, and that software will copy the message and sent it to every subscribed user. This method of communication is used frequently by academics and children alike. There are thousands, if not millions of listservs that are accessible to the public.
The third type of media is newsgroups. A newsgroup is essentially a computerized bulletin board. Users can freely post their opinions or questions about any topic. Those messages are then available for others to read and comment upon. The messages left on newsgroups are sent around the world to thousands of mirror or duplicate sites. Users can access the newsgroups from a local site, but when they post, their information becomes international. The topics of newsgroups are various.
The fourth type of media is chat rooms. Chat rooms are areas that people can get together and type messages in real time back and forth. They are designated "rooms" to segregate topics to enable unencumbered discussion. Users connect with the Internet, logon to the room, and are able to talk (type) with the other participants.
The fifth, and perhaps the best known, media type is the World Wide Web. The World Wide Web is a collection of files on computers that are programmed in a uniform language, hypertext mark-up language (HTML). These HTML files contain all sorts of information. Aside from plain text, HTML provides the benefit of formatting, color changes, and interconnectivity based upon "links." Links are pointers to other information on the Internet. All that is required to access that information is a click of the mouse. HTML documents also can contain movie clips, pictures, sounds, and other multi-media enhancements.
When a computer user accesses a web site over the Internet, several steps occur. First, the user initiates a request for information, a file, from a specific computer. The user’s computer sends the information to their Internet Service Provider who in turn sends it over the Internet until it finally reaches the destination computer. The destination computer then reverses the process with the requested information. The Internet Service Provider acts as a middleman for all information accessed by its users.
One of the advantages of the Internet is that it coordinates the routes which all information travels. At specific intervals, all of the computers on the Internet send status signals to designated Internet routers. These routers then choose the least active, and therefore, the fastest computers to send messages through. Using this means of communication, a user has no idea of the route a specific piece of information will travel. For example, an e-mail message from Minneapolis to Chicago may be sent via Tokyo, as opposed to Milwaukee, because the route to Tokyo was the least cluttered path. By enabling this kind of efficiency regulation, the Internet retains high-speed data transmission capabilities.
The vast majority of Internet gambling sites contain more than just a place to gamble. Some sites have chat rooms or bulletin boards that allow people to post and read messages left by users. Discussions on these sites include gambling, sports, technical assistance questions, computer topics, and anything else you can think of. These sites contain information that is, often times, difficult to find anywhere else.
Most sites have thorough explanations of the rules of the games, including odds and procedures. This information can be invaluable to users not gambling over the Internet. With the proliferation of gambling in the United States, consumers are increasingly looking to the Internet for information on gambling, such as rules and odds.
For example, a person wishing to visit a local casino to play craps. That person can visit an Internet gambling site that contains information on craps. The information provided on that site can give that person the information needed to participate in local gambling operations. The rules of some games, such as craps or baccarat, are not inherently obvious. The person can learn how to play craps from the Internet, without risking the loss of any money. The person can obtain information on terminology, procedure, betting, and odds of craps, all over the Internet. That person would then be able to take that information to the casino to avoid the bets in which the casino has the highest advantage.
Online casinos, however, are primarily in existence to entice Internet users to gamble. Typically, a user creates an account with the online casino before commencing gambling. The user either sends money to the casino (typically overseas), or more frequently, provides the casino with a credit card number. A sum of money, oftentimes around $100, is automatically charged to the user’s credit card account to be used as working funds. Along with the user’s name, address, username, and a password, the online casino creates an account that enables them to begin gambling. The online casino gives the user a password to access their account, and they are ready to bet. The total time needed to create an account can be as little as a few minutes.
A new development in online betting is proprietary software downloading. A site will prompt the user to download and install their special gambling software on the user’s computer. After the proprietary software is installed on the user’s computer, the user logs onto the Internet as usual and the new software connects to the gambling site’s special network for gambling. The special software is designed to make gambling easier. Aside from downloading the software, the procedures for betting via the Internet or proprietary software are the same. Additionally, some of the software downloaded does not require betting at all. It allows betting with fantasy money so the user could become acclimated with the games.
After the Internet user enters the casino either via their web browser and enters their password, or through the site’s software, the users are directed to choose a game. Games offered include Blackjack, Roulette, Craps, Baccarat, Solitaire, Video Poker, Keno, Slots, and many others. The user chooses the game and begins play. All of the games offered via the Internet are computer generated, there is no live-action dealer being filmed. All outcomes of the games are randomly generated in an ideal game, however, in reality, most Internet casinos are not completely fair. By programming the gaming software themselves, they can increase the casino’s advantage over the player’s substantially.
If a player loses, the amount of the loss is taken out of their working funds, which have already been deducted from their credit card account. If the working fund reaches zero, the user is prompted to authorize another $100 credit card charge. If the player wins, those winnings are credited to the user’s working fund. At any time, the player can authorize the online casino to credit all the money in their working fund back to their credit card, minus fees of course.
The Interstate Wire Act (IWA) currently bans all wagering using wire communications. However, it appears to only limit the actions of bookies, thus reducing its effectiveness against Internet casinos. The most relevant portion of the text reads:
(a) Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.
The main purpose of this law, as it is read, is to prohibit "bookies" from conducting their business over the telephone. It was not intended to encompass wagering on table games such as Blackjack and Poker.
Although it can be interpreted as prohibiting the use of the Internet, the public and many in law enforcement have not interpreted it that way. Most Internet casino web sites contain disclaimers and warnings instructing users that it may be illegal to bet over the Internet. The sites contain specific warnings for Minnesota, Indiana, and Hawaii users, because their state legislatures have specifically outlawed Internet gambling. The Internet gambling site warns all other users that it is their responsibility to ensure that Internet gambling is legal in their states. This proves Internet casinos and many users do not believe the IWA governs Internet casinos.
In the landmark case of Reno v. American Civil Liberties Union, the U.S. Supreme Court examined the role of the Internet and its legal status. The case arose from a challenge by the ACLU of the constitutionality of the Communications Decency Act (CDA). Passed almost unanimously by Congress in 1996, and signed into law by President Clinton, the CDA forbade the transmission of any communication which is "obscene or indecent," while "knowing that the recipient of the communication is under 18 years of age." Additionally, the act made it a crime to "use any interactive computer service" to "display in a manner available to a person under 18," any communication that uses "patently offensive" language or images. The ACLU challenged the statute as being unconstitutional because it violated the First Amendment.
The Court examined the statute and all nine Justices agreed that the second part of the act, displaying offensive images, violated the First amendment and was unconstitutional. Seven of the Justices also believed the first part of the act, transmitting material knowing the recipient is under 18, violated the First Amendment as well.
The rationale of this decision has great constitutional bearing on all future Internet related cases. First, the court stated that the Internet, and other widely available computer networks, was more like traditional print media and deserved the very broad First Amendment protection given to books and newspapers. Second, the Court distinguished regulation of the Internet from content regulation of cable and over-the-air broadcasting as stated in FCC v. Pacifica and subsequent cases. The Court stated that the rational for content-based regulation of over-the-air transmission was to protect the listener from unexpected messages. Because the Internet needed an affirmative act to find the offending material, Pacifica was not applicable.
The final portion of the analysis stated that Internet speech is protected by the First Amendment and all limitations of which must undergo strict scrutiny. Because the right in question is fundamental, the government must use the least restrictive means necessary to achieve their compelling state interest. In the case of the Communications Decency Act, the government failed to use the least restrictive means, and the act was therefore, unconstitutional.
The Internet Gambling Prohibition Act is being adopted to address three areas of concern: Legal, Social, and Economic.
The first area of concern is legal. The Internet Gambling Prohibition Act (IGPA) is designed to fix specific problems in the Interstate Wire Act (IWA). The IWA was passed in 1961, well before Internet gambling was even conceived. The Internet, therefore, is not specifically prohibited as a means of gambling, nor is the means of transmission used by the Internet. Additionally, the IWA only prohibits those "engaged in the business of betting or wagering," which does not encompass the casual bettor. Finally, the IWA specifically mentions sports betting but fails to specify other forms.
The second area that the Act addresses is social concerns. The IGPA is mainly created to curb under-aged and compulsive gambling. The reasoning is unfettered access to the Internet will increase under-aged and compulsive gambling. Children, it is thought, will equate Internet gambling and computer games as being the same thing. They will be unable to differentiate between the two. Because children are usually more Internet-savvy than are their parents, parental controls are ineffectual. Children would easily circumvent any form of controls.
Because of the Internet’s detached atmosphere, compulsive gamblers would have increased difficulty controlling their gambling. Gambling from the comfort of home lacks the noise and personal connections that most people associate with gambling. Furthermore, people may fail to recognize the amount of money they have lost. In a real casino, chips physically represent money being wagered. Without some kind of disincentive, like chips physically being taken from the gambler, people may not be able to determine when one has gone beyond one’s means.
Internet gambling would inevitably increase the numbers of addicted gamblers. In testimony before the Subcommittee on Technology, Terrorism, and Government Information, Ann Geer the chair of the National Coalition Against Gambling Extension stated that, "gambling is one of the fastest growing addictions in the country. Internet gambling would multiply addiction exponentially, increasing access and magnifying the potential destructiveness of the addiction. Addicts could literally click their mouse and bet the house." The ease of access and the availability of credit would dramatically increase the numbers of gamblers.
The third area of concern, and probably the largest, is an economic concern. The adoption of the Internet Gambling Prohibition Act is necessary to keep the economic benefits of gambling in the United States. The majority of Internet gambling sites are located in Caribbean nations. Proponents argue that with widespread international Internet gambling, billions of dollars will be lost to local economies. Gambling not only produces great revenues for casinos, but it also provides many jobs. It is argued that Internet gambling will not only fail to create new jobs for the American economy but will result in the loss of existing jobs at casinos. One of the main justifications for allowing legalized gambling in the United States is the creation of jobs and the generation of local revenue.
Moreover, it is feared that Internet casinos would move offshore to avoid taxes and become tax shelters. States and the Federal Government heavily tax legal gambling establishments in the forms of sales tax, corporate tax, income tax, and property tax. If gambling moves offshore, a main justifications for allowing gambling, increased tax revenues, would not apply. In addition, current companies engaged in gambling would move their corporations out of the United States to avoid taxes. They would find a method of wiring their profits out of the country and away from U.S. taxes.
The final consideration is money laundering. Much of the money earned from illegal activities is identified by law enforcement because it is difficult to spend. Illegal businesses must "launder" their money, or make it look legitimate before they can spend it without worry. The concern of law enforcement is that if massive amounts of money are being gambled over international telephone lines, then it will become almost impossible to identify money laundering from other illegal activities. The Internet casinos would become a haven for drug dealers, mobsters, and terrorists. They would purchase a casino and funnel all their illegal profits through that legitimate business, thus making the illegal funds virtually untraceable. Because the casinos would be located outside the United States, Congress and law enforcement would not be able to regulate and monitor their financial dealings.
Senator Jon Kyl created the Internet Gambling Prohibition Act (IGPA) in 1997. Senator Kyl’s legislation would amend the Interstate Wire Act (IWA) to include all forms of gambling and the Internet. It institutes six main changes to the IWA.
First, it expands the definitions of communications. It expands the definition to specifically include the Internet as a form of communication. To do this, it eliminates the word "wire" which modifies "communication" in the existing act. The bill also changes "transmission or receipt of data, writings" to "transmission of writings." Finally, the bill inserts "radio, electromagnetic, photo-optical, photoelectric, or other similar facility" in the definition of transmission facility. These changes make it abundantly clear that the Internet is intended to be included in this statute.
Second, it redefines "bets and wagers" to encompass all wagering using the following language:
The term bets or wagers--
(A) means the staking or risking by any person of something of value upon the outcome of a contest of chance or a future contingent event not under the control or influence of the person, upon an agreement or understanding that the person or another person will receive something of value in the event of a certain outcome;
(B) includes the purchase of chance or opportunity to win a lottery or other prize;
This language should successfully include all forms of wagering and gambling. There should not be any ambiguity as to what is prohibited. The old language only expressly prohibited sports betting.
Third, the original act only included "[w]hoever being engaged in the business of betting or wagering" (bookies) and did not prohibit the casual gambler. The IGPA strikes "[w]hoever being engaged in the business of betting or wagering" and "shall be fined ... or imprisoned not more than two years, or both" and instead inserts:
(a) In General--
(1) Persons Engaged in the Business of Betting or Wagering-- Whoever, being engaged in the business of betting or wagering knowingly uses a communication facility for the transmission or receipt in interstate or foreign commerce of bets or wagers, information assisting in the placing of bets or wagers, or a communication that entitles the transmitter or receiver to the opportunity to receive money or credit as a result of bets or wagers, shall be fined not more than $20,000, imprisoned not more than 4 years, or both.
(2) Other Persons -- Whoever other than a person described in paragraph (1)) knowingly uses a communication facility for the transmission or receipt in interstate or foreign commerce of bets or wagers, information assisting in the placing of bets or wagers, or a communication that entitles the transmitter or receiver to the opportunity to receive money or credit as a result of bets or wagers, shall be fined not more than $2,500, imprisoned not more than six months, or both.
This change in language would now include the casual bettor and the professional.
Forth, and for this analysis, most important is the inclusion of Internet Service Providers as "common carriers" for the purposes of the act. Every use of "common carrier" in the bill is substituted with "common carrier or interactive computer service provider." Therefore, ISPs would then be obligated, along with other common carriers, to "discontinue or refuse, the leasing, furnishing, or maintaining" of a facility in violation of this statute upon notification "by a Federal, State, or local law enforcement agency."
Fifth, the bill inserts a means by which a law enforcement agency can acquire an injunction for a common carrier that refuses to block access to an offending Internet site:
Injunctive Relief -- Any Federal, State, or local law enforcement agency acting within its jurisdiction, shall have the authority, following the issuance of a notice under paragraph (1), to seek an injunction or other appropriate relief from a Federal or State court of competent jurisdiction barring access to the communication facility at issue or preventing the use of such facility for the purpose of transmitting or receiving gambling information in interstate or foreign commerce in violation of Federal, State, or local law. [FN77]
This change is intended to allow law enforcement agencies to order ISPs to block Internet sites from their subscribers.
The sixth and final change to the law is the United States government will have extraterritorial jurisdiction over anyone who transmits or receives any wagering information to or from the territorial United States. It is conceivable that information relayed over Internet connections in the United States, but neither originates nor ends in the U.S. would be illegal under the law. In any event, the express purpose of the bill is to allow law enforcement to close gambling operations that have contact with the U.S.
The Senate passed the IGPA in 1998 by a vote of 90-10. The amendment was also introduced in the House of Representatives, but due to the Clinton Impeachment, it was dropped at the end of the session. The bill is expected to be reintroduced in 1999. With the bipartisan showing of support in the Senate, the bill is expected to pass both houses of Congress and be signed into law by the President.
The effect of the IGPA on individual Internet users is twofold. First, the IGPA would make it illegal to wager over the Internet. The individual user would not be allowed to bet over the Internet, but the likelihood of detection, under the current bill, is almost nothing. The only realistic method of catching individual Internet users would be via the seizure of records of offending Internet casinos.
The second effect on individual users would be blocking of Internet gambling sites by ISPs. The law, as written, requires ISPs to block Internet gambling sites on the Internet. If they fail to do so, law enforcement agencies can obtain an injunction. The effect of which would be Internet censorship.
The effect on Internet gambling sites needs to be analyzed according to whether the site is based in the U.S. or is foreign. Domestic Internet sites are more likely to be identified and prosecuted, but the likelihood of that happening is remote. Most domestic Internet sites would relocate offshore to avoid U.S. restrictions.
Foreign-based Internet casinos would be virtually immune from prosecution. The ability to identify Internet sites is difficult. The ability of sites to change their location on the Internet is extremely easy. If law enforcement identified an offending site, it would take less than one hour to relocate that site to another address on the Internet.
Additionally, to prosecute an offending site is difficult, but discovering who actually owns the site is nearly impossible. The ability to disguise oneself over the Internet is easy. One needs to provide little information to open an Internet site. Up until a few years ago, registering a site on the Internet was free. Today it only costs $100. The ability to avoid prosecution as an offending site, especially of located outside the U.S., essentially makes this portion of the IGPA unenforceable.
The effect on Internet Service Providers is the focus of this paper. ISPs are required under the IGPA to block access to Internet gambling sites. However, the Internet gambling sites are expected to be able to easily circumvent this provision of the IGPA. One of the benefits of the Internet is the ease upon which one can create a site in a short period of time. It is also extremely easy to alter the address, or location of sites. It would therefore become difficult for the ISPs to maintain a ban on all gambling sites. It is logical to assume that several groups would keep a close eye on Internet gambling sites and would notify law enforcement of offenders who, in turn, would notify ISPs. However, there are no provisions in the IGPA to create or fund these "watchdog" groups. The success of the law rests upon the ability to refuse access to Internet gambling sites. Without an explicit means to detect sites and notify law enforcement agencies, this provision falls short of its expectations.
The IGPA allows law enforcement to require ISPs to block their users from accessing suspected sites. If the ISP does not want to block access, law enforcement can obtain an injunction ordering the ISP to comply. The ISP has no real choice in the matter. Even if the site is not overtly engaged in gambling, or gambling is only a portion of the site, the ISP has no choice but to comply with the law.
Restricting access to offending sites is the best, and the only practical method of stemming Internet gambling. Without this provision, the act would not be very effective.
The enforcement of the IGPA is to be carried out by any law enforcement agency in the United States. This may become problematic as to the uniform nature of enforcement, but enforcement is not a primary concern of this paper.
All legislation enacted by Congress must comply with the Constitution of the United States. Over the years, the Supreme Court has developed a sophisticated, yet simple test to determine the constitutional validity of all laws in the United States.
Due process began, in essence, with the Shaughter-House cases. The Supreme Court, deciding if Louisiana can grant a monopoly on New Orleans-area slaughterhouses to a single company, declined to apply the text of the Fourteenth Amendment to states. The Court held that this monopoly did not violate the Due Process Clause of the Fourteenth Amendment on the theory that the Due Process Clause only gives Procedural Due Process protection. A Justice dissented arguing that a statute that prohibited a large portion of the population from lawful employment deprived them of liberty and property without due process. This view was later adopted by the Court.
After the Slaughterhouse Cases, the Supreme Court was under pressure to look more deeply at state legislation, which it began to do. The cases of Munn v. Illinois and Mugler v. Kansas the Court began to indicate that it would be willing to engage in substantive review of future cases. In Munn, the Court indicated that in the future, it would what regulations were reasonable of "private contracts." In Mugler, the Court stated that legislation enacted under the states’ police powers would only be valid if the legislation actually related to the protection of public health, safety, or morals. Additionally, the legislation would only be valid of it did not violate rights secured by fundamental law.
Finally, in 1897, the Court used substantive due process to invalidate a statute. In Allegeyer v. Louisiana, the Court struck down a Louisiana statute prohibiting its citizens from purchasing insurance from a company not licensed in Louisiana. The Court reasoned that the statute violated the freedom of contract. The significance of this case is the Court’s Constitutional interpretation of the Fourteenth Amendment. The Court stated that liberty, in the Fourteenth Amendment, encompasses more than just physical liberty but also the rights to choose where to live and work, the freedom to contract, and to earn a living by any legal means. This is a sharp change in attitude over previous cases, but the Court had not established a solid method for evaluating cases. The Court began structuring a test with Lochner v. New York.
Lochner involved a law limiting the number of hours a bakery employee could work per week to 60. The Court struck the law down as an abridgment of the "liberty of contract," and a violation of due process. The Court rejected New York’s arguments that the law was a valid labor law and it protected the health and safety of workers. The Court quickly dismissed the argument that it was a valid labor law because it was not within the state’s police power. The Court decided that bargaining power between bakery workers and employers was sufficient to govern working conditions. Lacking a showing that bakery workers were in need of protection because of some diminished capacity, the law was not within the police power of the state.
The argument that the law was a health and safety measure failed because there was, again, no proof that bakery workers needed protection, such as miners did. Additionally, long hours did not endanger the health and safety of the products, and therefore did not effect the public.
The Supreme Court looked past the legislation to the motives of the legislature. The Court did not believe that the Legislature was acting for health and safety reasons. This implied that, in the future, the Court would examine actual motive for legislation, not just hypothetical motive when evaluating legislation. Additionally, and probably more importantly, the Court did not defer to the legislature’s findings of fact. The Court made its own decisions as to the conclusions that the legislature made. The Court decided the number of hours a baker may work and the quality of the bread did not have a connection. Thus, the Court created a means-end test for prospective legislation.
The decisions of Lochner were heavily criticized in the three decades following that decision. But the significance of Lochner is still intact: the United States Supreme Court was going to examine seemingly innocuous state legislation for constitutional validity. The Lochner means-ends test was further developed into a solid constitutional test.
The first major modern case which used a substantive due process approach to protect fundamental rights is Griswold v. Connecticut. In Griswold, the case involved a Connecticut statute which forbade the use of contraceptives and aiding or counseling others in their use.
The Court struck down the statute 7-2. The majority opinion created a "penumbra" of rights or privacy. It concluded that the use of contraceptives by married people fell within this penumbra. The means-end test that the current court uses was developed in Justice White’s concurring opinion. In his concurrence, Justice White indicated that he would have upheld the statute if it had been "reasonably necessary for the effectuation of a legitimate and substantial state interest." The Connecticut statute, which served the state’s policy against unmarried sex, was too broad because it effected married couples. The statute was therefore too broadly drawn to effectuate a supposedly legitimate state interest.
Justice White’s concurrence in Griswold was explicitly stated in the controversial case of Roe v. Wade. The Court, deciding on the legality of abortion, held that a fundamental right could only be outweighed by a "compelling state interest" and the statute is "narrowly drawn" so that it fulfills only that compelling state interest. The Court stated that a woman’s interest in deciding an abortion was fundamental. It could only be outweighed if the state could prove a compelling state interest in limiting that right. In addition, even if that interest was compelling, the state’s means to achieve that end must be narrowly drawn and not effect other rights. This test, although slightly altered in later cases, holds true today.
In the alternative, if the right is not fundamental, the statute is subject to the rational relation test. In the case of Duke Power v. Carolina Environmental Study Group, Inc., the court held that when a regulation does not effect a fundamental right and it falls within the state’s police power, all that is required is that there be a minimally rational relation between the means chosen and the end being pursued. If the Internet Gambling Prohibition Act does not effect a fundamental right, it is subject to this test.
The Court’s holding in ACLU v. Reno stated that the Internet is similar to print press so it should be afforded the utmost protection. This statement requires all legislation limiting the Internet to be tested under the fundamental rights analysis put forth in Roe v. Wade. The Court created a two-tier approach to the evaluation of the constitutionality of any given law that may impinge upon a fundamental right. The state must have a compelling state interest, and the means must be as tightly related to the ends as possible. The analysis goes as follows: (1) The court addresses the issue of whether the law in question touches upon a right. If yes, (2) is that right a fundamental right? If yes, the law is then subject to "strict scrutiny." If the answer is no, then the law is subject to the Rational Relation test. Strict scrutiny entails a compelling state interest and most narrowly tailored means to the end. Therefore, (3) does the state have a compelling state interest? And (4) is the means narrowly tailored to the end? Narrowly tailored to the end is the question of does the law adopt the least restrictive alternative to achieve the purpose of the statute. If the answer to all four of these questions are yes, then the law is constitutional. If the answer to either (3) or (4) is no, then the law is unconstitutional and is struck down. It is under this analysis that the Internet Gambling Prohibition Act must be analyzed.
Step one is to determine if the law in question, the IGPA, infringes upon any right. The answer is yes. The IGPA restricts the publishing ability of web sites. The Court in Reno v. ACLU held that the Internet was like a publication, and therefore was entitled to First Amendment protections.
Additionally, there is an argument that people have a right to gamble over the Internet. It is a free choice, made without coercion, so therefore there may be a right to spend their money as they wish.
Step two is if the rights in question are fundamental. The first right mentioned is the right of free speech. There is no question that the law has the effect of censoring the web site owner’s right of free speech. The IGPA provides for the total blocking of all content on the Internet which concerns Internet gambling. The Supreme Court in Reno stated the publishing over the Internet is a fundamental right which should not be restricted. Because Internet gambling web sites contain more information than merely illegal gambling, they are publications. The effect of the IGPA is to infringe upon the rights of the owners of web pages to publish. Therefore, there is a fundamental right of free speech to publish over the Internet and the IGPA should therefore be subject to strict scrutiny.
The second right mentioned is the right to spend your money in a way that does not hurt anyone. The court has never recognized a right to gamble, let alone a fundamental right to gamble. On the contrary, the court has specifically upheld prohibitions upon gambling. Gambling a choice that states may chose to allow or forbid. Therefore, there is no fundamental right to gamble. However, since there is a fundamental right to free speech, the IGPA is still subject to strict scrutiny because it does involve a fundamental right to free speech.
Step three, is the application of the first tier of the strict scrutiny analysis; does the state have a compelling state interest in prohibiting Internet gambling. The answer to this question is uncertain. The state undoubtedly has a legitimate state interest in prohibiting Internet gambling, but whether the interest rises to a compelling state interest is unknown. The Court in past cases has carefully considered whether a legitimate state interest is compelling, but it fails to give guidance as to what is considered compelling. In the past cases, the Court has merely determined that the state’s interest is compelling and continued on with the analysis. The only case which I have found which carefully considers if a state interest is compelling is Roe v. Wade. However, in Roe, the court examined each of the stated justifications for the state interest and made a determination if the interest was compelling. The court engaged in no analysis, and only made value judgments. Therefore, the determination of whether the state has a compelling interest is solely up to the Justices of the Supreme Court.
I would argue that the state does not have a compelling state interest in the banning of Internet gambling because gambling is almost uniformly accepted. As it was stated earlier, only two states ban all forms of gambling. The rest of the states and the District of Columbia allow some form of gambling. For Congress to authorize gambling in Washington D.C., but then state that there is a compelling state interest to stop gambling is illogical. If gambling is such as harmful act, then outlaw it in Washington D.C. first.
Additionally, the claim that underage gambling will increase if Internet gambling is allowed is nonsense. All of the lottery tickets I have purchased in my lifetime were purchased when I was under 18. Underage gambling exists now, and is easily to come by. Gambling over the Internet would not significantly increase underage gambling. Most sites require that a credit card number be entered before a person can gamble. Most people under the age of 18 do not own a credit card. If they steel a credit card for use of gambling, gambling is the least of society’s worries, theft and credit card fraud is far more important. While government may have a legitimate interest in Internet gambling, it hardly raises itself to a compelling state interest.
The determination of whether there is a compelling state interest lies entirely with the Justices of the Supreme Court and cannot be anticipated. Because it is uncertain if the state has a compelling state interest in prohibiting Internet gambling, I will assume that there is a compelling state interest and continue with the analysis.
Step four in the process is whether the means of the law are narrowly tailored to the end. In this case, they are not. The state’s interest is in prohibiting Internet gambling. The effects of the IGPA reach farther then just Internet gambling. The IGPA abridges the right to free speech. In order for this law to be upheld, the state must use the least restrictive means necessary to achieve the compelling state interest. That means that there cannot be another way in which the state can prohibit Internet gambling without banning all Internet gambling casinos. In this case, there is a less restrictive alternative, banning Internet gambling.
Proponents of the IGPA would argue that the only way to successfully stop all Internet gambling is to stop people from being able to access them. XXXXX
The least restrictive means to the end would be to make it a crime to engage in gambling over the Internet. It would ban bettors and casinos from doing business over the Internet or other interstate networks. The ban would achieve the stated goal of making it a crime to engage in Internet gambling. Because the ban would not effect a person’s right to publish materials over the Internet, it would not involve free speech. Because the means in which the government wishes to stop Internet gambling encompasses more than just it’s stated cause, the means are too broad and are therefore unconstitutional. The least restrictive means by which the government can ban Internet gambling is to ban Internet gambling. There is no need to involve free speech in the legislation at all.
Because the Internet Gambling Prohibition Act is not narrowly tailored to the means, the statute is unconstitutional if passed by congress.
Congress’ goal to restrict Internet gambling is laudable, but the means by which they restrict it are unconstitutional. Congress could effectively curtail Internet gambling through better, constitutional alternatives. I would propose a four-tier attack on Internet gambling, which is constitutional.
The first tier would be a prohibition of credit card transactions with known Internet gambling companies. This is a simple provision. The legislation would state that all gambling over communication facilities, including the Internet, is illegal. It would outlaw conducting transactions as an Internet casino, and with an Internet casino. It would provide means by which a law enforcement agency can instruct credit card companies to disallow transactions with known offending companies. In addition, it would grant jurisdiction over all companies that conduct business with the U.S. Primary law enforcement jurisdiction would be granted to the Department of the Treasury and the Secret Service to enforce its provisions. National enforcement would ensure uniform application.
Implementing this provision requires little work. First, a known Internet gambling company would be identified. The easiest way to do this would be to search the Internet. Once the site is found, an attempt to determine the company’s name and location would be made. If the information were not readily available, then a law enforcement agent would proceed to gamble and lose a nominal amount of money to the company. The agent would use an undercover credit card number that is not traceable to the government. The next day, inquiries would be made to the credit card company to determine the name and bank account of the Internet casino. The information of the Internet casino would then be transmitted to the networks that oversee credit card transactions, such as Visa, MasterCard, Discover, and American Express. The companies would be instructed not to honor all transactions with these companies. Additionally, the credit card company can be instructed to provide the government with the names of individuals who had charges from the Internet casino, which the government could later use to prosecute cases.
The advantages of this approach are great. First, there is no infringement of the First Amendment because it does not ban any publications on the Internet. Citizens are free to look at the Internet casino web sites, but they cannot gamble. Second, because there is no longer a question of free speech, there is not fundamental right to be abridged. If there is no fundamental right, then the appropriate test is rational relation. Third, the ease of credit card transactions facilitates Internet gambling. If people had to conduct business through the mail, consumers would be more wary of the transaction and be more skeptical of receiving their winnings. Removing credit cards as a means of payment cuts off the main method of commerce. Finally, because the means by which the companies conduct business is restricted, it would effectively shut down Internet casinos.
The disadvantages of this method are few. Identifying Internet gambling web sites is difficult. Finding illegal betting sites may become difficult after a period of time. However, this is not a significant disadvantage because the IGPA would suffer from this as well.
Another disadvantage I can imagine is burst-transactions. A gambling site would conduct all transactions once a week. The government can shut down their account, but a week later, the site will have a new account. By creating a new account every week, it would effectively circumvent the closing of accounts. However, all transactions from the accounts could be nullified, thus making every week’s transactions illegal and void. The Sites would conceivably not make any money each week.
With the outlawing of credit card transactions over the Internet, Internet casinos would attempt to find additional means to conduct business. The next logical option would be wire transfers, checks, and bankers drafts. My proposed legislation would restrict all bank transfers to the accounts of known Internet casinos. Using similar means as credit cards, law enforcement agencies would transfer money to the casino to determine the bank accounts used by the casinos. Then the agency would instruct all banks to disallow all money transfers to those bank accounts.
The advantages of this approach is similar to the credit card approach. By removing the means by which companies do business it would effectively shut these companies down.
The disadvantage to this approach is the negative effect on legitimate companies. For example, an Internet company may submit it’s receipts to another company which deposits their money combined. By restricting the illegal transaction, a legitimate company may have their transactions voided. Unfortunately, the legitimate company may be effected, however, it is still illegal. This is similar to laundering money. The legitimate company knowingly engages in an illegal activity and therefore should also have it’s transactions voided. It is akin to money laundering. Regardless of the culpability of the actors, the possession of the money is illegal.
The third prong to this proposition would be to outlaw Internet gambling. Using the information obtained in the first two prongs, and by any other means, people could be prosecuted for gambling over the Internet. This provision is necessary to catch people engaging transactions such as cash. By creating a statute that clearly outlaws Internet gambling, it would allow law enforcement agencies all over the country to pursue cases against offenders.
The main advantage of this provision is that it encompasses every type of transaction that exists. Internet gambling sites would inevitably discover other means by which to conduct business. By simply outlawing the gambling altogether, law enforcement can keep up with the changes in technology and methods the sites use to conduct business.
There really is no disadvantage to this provision.
The fourth and final provision would make all Internet gambling debts unenforceable. For example, take the case of Ms. Cynthia Haines of Marin County California. Ms. Haines is suing her credit card companies for trying to enforce her Internet gambling debts. Her theory is that the credit card companies cannot act to enforce a illegal debt. This is exactly what this provision seeks to do. By making all debts unenforceable, Internet gambling companies would never be able to collect their money and would go out of business. People who gamble on credit, despite the earlier provisions, could nullify their debts. Without a method of collecting money, the Internet gambling companies would surely cease their activities.
The main disadvantage of this provision would be the hesitation of people to come forward to nullify their debt. Because gambling over the Internet is illegal, people would be unlikely to declare themselves criminals. There is a conflict between this provision and the provision outlawing Internet gambling. Unfortunately, if an exemption were created which would allow people to nullify their debts without being arrested for Internet gambling, it would greatly reduce the deterrent effect of outlawing Internet gambling.
A small exception might help this provision. By making all confessions to Internet gambling a lesser crime, people may be more likely to come forward.
This four-tier approach would have a detrimental effect on Internet gambling. First, by outlawing all credit card transactions and banking transactions, it removes the main methods of conducting business for Internet gambling companies. Second, by outlawing Internet gambling altogether, all other means of Internet gambling is therefore illegal. This would deter a large portion of the population from engaging in Internet gambling. Third, by nullifying all Internet gambling related debts, it would make it more difficult for Internet gambling companies to conduct business. Finally, all the means by which this provision outlaws Internet gambling is constitutional. It does not interfere with a person’s right to create and visit an Internet gambling site.
This entire proposal would have a great effect on Internet gambling. By outlawing Internet gambling, without interfering with the right to free speech, this provision would surely have a significant impact on Internet gambling. By creating a neutral law outlawing Internet gambling (provision three), whatever means by which Internet gambling companies choose to operate is illegal. This four-tier approach would curtail Internet gambling to an almost undetectable level.
Without significant and timely restrictions on Internet gambling, Internet gambling will surely grow and thrive. Internet gambling will have many impacts on society, the effects of which are undesirable. The Internet Gambling Prohibition Act, while a laudable idea, is clearly unconstitutional. By restricting the access to Internet gambling sites, the act unconstitutionally limits a web site publisher’s right to free speech and freedom of the press. Since the Internet is afforded the utmost protection from restriction by the Supreme Court, an alternative must be found which does not effect a person’s right of access to Internet sites. By adopting a comprehensive set of laws which restrict transactions, outlaw Internet gambling, and nullifies existing debts, Internet gambling can be easily curtailed.