Ron Paul: Let the States Decide on Gambling

The news that four Republican congressmen recently sent a letter to Deputy Attorney General Rod Rosenstein demanding the federal government overturn nearly a dozen state gambling laws is just the latest attack on the Constitution and the concept of federalism.

The Founders of the Constitution created federalism because it is the antidote to tyrannical power. As James Madison said, “The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.”

While the Founders did not impose an ideological litmus test on federalism, too many modern politicians do. My friends on the left have no problem citing the Tenth Amendment for the state legalization of marijuana and my friends on the right will happily mention federalism when it comes to issues such as gun control and abortion, but not vice versa.

To say consistency is lacking on the subject is an understatement.

However, one issue of federalism which most on the left and right finally appear to agree on is gambling. States have regulated their own affairs in this industry since the inception of the Constitution.

Some states have gaming available in gas stations and convenience stores while others don’t even allow state-run lotteries. Some in Washington want to threaten this balance as they seek to please a crony, Republican-donating casino owner.   

GettyImages-645121406 Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson before a speech by U.S. Vice President Mike Pence (not pictured) at the Republican Jewish Coalition's annual leadership meeting at The Venetian Las Vegas on February 24, 2017 in Las Vegas, Nevada. Ethan Miller/Getty  

After the Justice Department reversed its federal ban on the state legalization of online gambling in 2011, New Jersey quickly legalized it, while several others – Delaware, Nevada, and Pennsylvania – followed suit. Some states like Georgia also allow the online sale of lottery tickets.

The decision of these states to permit online gambling has no impact on other states. Technology prevents residents from restrictive states like Utah from gambling on the sites of more permissive states like New Jersey, yet members of Congress have repeatedly set out to dictate how states can govern their residents.

The attack on the states’ ability to establish their own gambling laws comes mainly from one Las Vegas casino owner. Sheldon Adelson, a generous contributor to GOP political campaigns, had Darryl Nirenberg, his personal lobbyist, draft legislation that would establish a federal ban on online gaming.

As Tho Bishop at the Mises Institute pointed out, Adelson donated $20 million to the Republican Senate Leadership Fund to pressure GOP members into introducing his protectionist legislation.

When the bill failed to move, an effort was undertaken to pressure Attorney General Jeff Sessions to impose this anti-gambling view on the states. The Adelson crowd went so far as to hire a lobbyist that was a longtime friend of Sessions this summer. After Mr. Sessions was forced to recuse himself, Deputy Attorney General Rod Rosenstein has become the new target for this pressure campaign.

Recently, four Republican congressmen, including my friend Rep. Louie Gohmert (R-Texas), dispatched a letter to Mr. Rosenstein urged the Department to pull the plug on the states’ ability to set their own gambling rules. Suggesting the federal government should dictate state law constitutes a black mark on their record.

Some states have begun to fight back. For example, bipartisan members of the New Jersey delegation responded with their own letter to DOJ demanding a hands-off approach.  

They note that “placing a blanket prohibition for online gambling would be an antiquated approach to a 21 st -century issue, punishing states like New Jersey, which have invested in creating a safe and secure online gaming structure, while also permitting black market operators to put millions of Americans at risk."  

The danger of opening this Pandora’s box is obvious. Today, social conservatives may seek to ban state-regulated online gambling. But tomorrow, opponents of online ammo sales may use this precedent to advance their political agenda. Just how big would this domino effect of resisting the Tenth Amendment get?

Gambling, like other controversial issues, are best decided in state capitals, not by federal dictates. The Founding Fathers recognized this fact. It is time for modern-day politicians to realize it as well.

Ron Paul, a former congressman for Texas, is host of the Ron Paul Liberty Report and Chairman of Campaign for Liberty.