Indiana AG Against Federal Regulation

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There has been opposition to the bills, Barney Frank's HR 2267 and Jim McDermott's HR 4976, that seek to legalize and regulate online gambling. Usually the reasons propounded are that online gambling is immoral, minors cannot be prevented from accessing online gambling sites, online gambling is addictive and can lead to financial ruin and that criminal elements can use it for money laundering. Now the Attorney General of the state of Indiana, Greg Zoeller, has provided a new and unique reason for not going ahead with these bills. Speaking before the United States House Ways and Means Committee, Zoeller claimed that regulation and licensing at a federal level will infringe on the states' rights and abilities to make its own choices with regards to online gambling.

Zoeller said that if these bills are passed then the United States Department of Treasury would issue licenses to online gaming operators and once the Treasury issued a license there would be nothing that the state could do to prevent or control that operator. For example, such operators would be shielded from prosecution under state law. Zoeller said, “States should be free to decide for themselves whether to endorse online gaming at the state level.” He pointed out that as the Attorney General for the state of Indiana he is required to ensure that the state has the ability to pass its own laws and “not have them nullified or preempted by the federal government”.

The Indiana Attorney General also questioned the promotion of the “anti-UIGEA” bills on grounds that they had the potential to raise billions of dollars in revenue. He pointed out that the estimates of revenue assume that states would allow online gambling as desired at the federal level without imposing any barriers or restrictions. He feared that federal budgets would be balanced at the cost of the autonomy and the finances of the states.

The various United States sports associations have come down heavily against legalized online sports betting. They claim that this will pave the way for corruption in sports. Barney Frank has attempted to placate them by assuring them that online sports betting will not be legalized. Zoeller does not buy this. His view is that even if sports betting is kept out of legalized online gambling to start with, once online poker and casino gambling become legal it will be difficult to keep sports betting out permanently.

In the final analysis he says that gambling regulation has traditionally been a state matter and it should be left to the states to control online gambling rights within their borders.

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