Internet Gambling Ban Not Discriminatory

In May 2010, I had an article published titled, The Plight of PASPA: It’s Time to Pull the Plug on the Prohibition.  It argues that the Professional and Amateur Sports Protection Act of 1992, which denies 46 states from adopting any type of state-sponsored sports betting scheme, has an outdated purpose and is in violation of the Tenth Amendment and Commerce Clause within the United States Constitution.

The State of Washington is one of the 46 states that cannot have a state-sponsored sports betting scheme.  The state also bans all internet gambling.  Last month, the Supreme Court of the State of Washington considered whether the ban is an unconstitutional infringement of the dormant commerce clause as a state regulation impermissibly burdening interstate and international commerce.

In the case of Rousso v. State, the Court found that the language of the ban is not discriminatory and that it does not have a discriminatory effect on interstate commerce.  The ban prevents online gambling inside Washington for sites located inside and outside of Washington.  This evenhanded treatment allowed the Court to find that the statute is not discriminatory under the dormant commerce clause.

As the Court notes, “the dormant commerce clause only prevents a state (under most circumstances) from discriminating based on whether the business is in-state or out-of-state.”  In this case, it seems that the law could not care where the business is located.  Additionally, the Court mentions that internet gambling and brick and mortar gambling are two different kinds of activities, and a state can regulate different activities differently.

Interestingly, the Court points out to the state’s police power in protecting its citizens’ health, welfare, safety, and morals as a main justification for overcoming the detriment to companies hoping to capitalize on the Washington market.  I am not so sure that I buy the argument that “ties to organized crime and money laundering are exacerbated where on-line gambling operations are not physically present in-state to be inspected for regulatory compliance.”  I do agree, though, that the burden placed on internet gambling sites is minimal.  It is easy to add a section to a sign-up page where a user inputs his/her residency.  If it happens to be Washington, then a simple script denies access.

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