The Online Gaming Debate: Not So Fast, Congress

Illustration by Jon Estrada

Illustration by Jon Estrada

As I write this, a bill that would recriminalize online gaming—even where U.S. states have sanctioned and regulated it—has been introduced into Congress. Should the bill pass as written, the online gaming industries of Nevada, New Jersey and Delaware, representing millions of dollars in investment and thousands of hours of regulatory effort, would be switched off immediately.

I find it hard to believe that Senate Majority Leader Harry Reid could let that happen. At the same time, those who have pledged to “roll back” online gaming won’t just surrender. This is one more controversy most incumbents would be glad to duck. Rolling back online gaming where it exists now would almost surely result in a lengthy and costly legal battle between states and the federal government, and is bound to satisfy nearly no one: Those who don’t like gambling will want it reduced further, and those who don’t want the government to tell them how to gamble will be outraged.

With both sides ratcheting up their lobbying, though, it seems that Congress is painting itself into a corner without a way forward or compromise that will satisfy everyone.

But maybe there is.

A new national gambling study commission would help lawmakers genuinely learn more about the subject, and provide valuable short-term political cover for everyone.

There are precedents here: Congress has studied gambling several times; the first national look at the topic, the 1950-52 Kefauver Committee, primarily considered illegal gambling and resulted in laws that restricted the transportation of slot machines and taxed sports betting—both attempts to stifle gambling, illegal and legal.

The second major investigation, the 1974-76 Commission to Review the National Policy on Gambling, took place just as states were moving into the business via lotteries. While it expressed some reservations about illegal gambling, the commission concluded that states were qualified to choose for themselves their level of gambling, and even cautioned the federal government not to “hinder” state efforts to legalize it.

The most recent major study, the National Gambling Impact Study Commission, met from 1997 to 1999, as states were legalizing commercial casinos and signing compacts to facilitate tribal gaming. Initially, those in the industry feared that this group—with a healthy representation of known gambling opponents—would initiate federal action against casinos. Ultimately, however, the commission delivered a balanced report that recognized the potential of casino gaming as a positive force.

That commission filed its final report 15 years ago. Since then, the gambling world has gone through revolutionary changes. Las Vegas is no longer the global leader in gaming; casino proliferation has increased; and, of course, online play has promised to transform not just casinos, but lotteries and horse-race betting as well.

In other words, gambling in America has changed at least as much between 1999 and 2014 as it did between 1976 and 1999. A new look at the industry—a thorough investigation and discussion—might be the only way to develop a coherent national policy.

Right now, to the extent that there is a coherent policy, it’s being shaped in fits and starts. Legislators are reacting (or not reacting) to messages from competing interest groups, with little chance to divine the true nature of the choices facing us, the needs of the country or the wishes of the electorate.

A national study of gambling, in which full-time staffers could dig through the hype and hysteria to assemble a body of knowledge that accurately reflects where the country is (and where it can go, for better or worse) would give lawmakers something on which to base their votes.

Pragmatically, it would allow incumbents to defer action, never an unpopular course. Assuming Congress passes a bill authorizing a commission just before the November elections, it would take at least a year to select commission members and hire staff. The commission would likely start deliberating in early 2016 and deliver its final report in 2019—two elections away.

But this isn’t about not acting—it’s about gathering the intelligence needed to act decisively. Four years might seem an eternity to those who want immediate, radical changes, but it would get the industry—and the nation—the comprehensive study gaming demands.

David G. Schwartz is the director of UNLV’s Center for Gaming Research.