Internet gambling harmful to minorities

Years ago, big city visitors often came across an enticing scene on certain street corners.  A crowd of people standing in wonder as someone – typically called the “mark” –  tried to pick the “money” card out of three cards laying face-down on a cardboard box.  Pick the right card, you win. 

Chances weren’t very good, of course, and a lot of folks lost money playing that old confidence game until Congress – and an ambitious young Attorney General named Robert F. Kennedy – began to crack down on illegal gambling and organized crime in the 1950s.  The result was a package of bills,  including The Wire Act, that Kennedy pushed through Congress in 1961 to keep the mob from exploiting citizens and laundering money through its illegal gambling operations.

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For more than 50 years, Kennedy’s law was interpreted broadly to cover all forms of gambling, including the online variety which came into vogue a decade or so ago. This all changed, however, when the Justice Department – without consulting Congress and with little apparent appreciation for the legislative history or public policy behind the Wire Act – issued an opinion that the Act no longer applies to most kinds of Internet gambling. 

This new interpretation, issued with little fanfare two days before Christmas in 2011, runs directly counter to the Justice Department’s own long-held interpretation, and opens the door for the unfettered U.S. expansion of Internet gambling by States looking to dig out of holes created by the economic downturn.

According to numerous reports, these DOJ lawyers were acting at the request of a small number of state lottery officials hoping to sell lottery and scratch-off tickets and offer other gambling games over the Internet.  Now I certainly concede that state lotteries have helped improve a lot of people’s lives through its targeted funding initiatives.  But common sense tells me there should be limits.  And in my opinion, making lottery tickets and other casino games available 24/7 on cell phones, tablets and personal computers takes gambling – and lotteries -- too far.

Having previously served as an African American mayor for a large urban area, I have had lingering concerns that poor people and minorities may be especially vulnerable when it comes to gambling.  Several studies from extremely credible sources seem to bear this out. 

A 2009 study by the National Institute of Health (NIH) finds that African Americans are nearly twice as likely to be “disordered gamblers” compared to the white population; and low income wage earners making less than $20,000 are five times as likely to have such addiction issues compared to their higher-earning brethren making more than $70,000 per year. 

When it comes to lotteries, a University of Buffalo study shows that persons in the bottom fifth of the economic ladder are more likely than other segments of the population to play the lottery.  African Americans, males, Native Americans, and folks living in the most economically disadvantaged neighborhoods tend to play the lottery to greater degrees than the general population.

Interestingly – and this has particular relevance to the current debate over internet gambling – Pew Internet Research suggests that minority communities are uniquely susceptible to the threat posed by 24/7 access to Internet gambling, finding that African Americans and Latinos are more likely than whites to both own a smartphone and count on those phones for uses other than making calls.  

Bobby Kennedy and Congress seemed to have understood much of this back in 1961 when they made the Wire Act the law of the land.  Indeed, the legislative history shows that Kennedy and Congress hoped to stamp out those “numbers” games which seemed to be ubiquitous on street corners in poorer neighborhoods of the era. 

Unfortunately, it doesn’t appear that the DOJ took any of this into account when they reversed course and effectively legalized Internet gambling when no one was watching.  It’s time for Congress to re-assert its policy-making role by putting the teeth back in the Wire Act until it can fully weigh the policy implications of making internet gambling so easily available in our communities.

Webb is the former mayor of Denver and a national co-chair of the Coalition to Stop Internet Gambling, an effort funded in part by Las Vegas casino billionaire Sheldon Adelson.