The State of Utah has enacted a law that extends its prohibition on real world gambling to games played on the internet. The new law makes it a crime both to offer internet gambling to a player located in Utah and to participate in a game as a player located in Utah.
The new law functions by amending Utah’s Criminal Code with a definition for “internet gambling” and providing that a person is guilty of the already existing crime of gambling if he participates in internet gambling or provides it to a person located in the state. As a matter of legislative drafting, it took very few words to accomplish what the drafters intended.
The criminal penalty for a player who participates in internet gambling is the same as for a player who participates in real world gambling. The first offense is a class B misdemeanor (up to six months in jail and/or a fine of up to $1,000), and the second offense is a class A misdemeanor (up to one year in jail and/or a fine of up to $2,500). Any operator of an internet gambling service who knowingly offers internet gambling to a person located in Utah is guilty of a class A misdemeanor.
The new law recognizes that internet service providers and hosting companies may incidentally route data across the state without actually making the data available to a person located in Utah, and there is therefore an exception relieving communication carriers of criminal liability under the statute.
The new law takes effect July 1, 2012.
(See the Act in bill form as Utah H.B. 108).
A common criticism of Utah’s new law is that it is a step in the opposite direction of progress. The assumption underlying this criticism is that the states should move toward regulatory frameworks that balance the protection of personal freedoms against the need for appropriate consumer and community protections.
However, progress also entails restoring the states’ rights to make and enforce their own decisions for the safety and welfare of people located within their territory. Over the next several years many state legislatures will decide to legalize internet gambling. In all states the enabling acts and regulations will provide substantial precautions against the perceived social risks associated with gambling. Some of the most easily recognized precautions come in the form of high tax rates, wagering limits, and advertising restrictions. Each state may very well make different decisions about how minimal or extensive these precautions should be.
Nevada, for example, has traditionally made gambling opportunities widely available throughout its territory. It was entirely consistent with Nevada’s traditional values when last year the state legislature became the first to enact a statute legalizing “interactive gaming.” Utah, on the other hand, is one of only two U.S. states which statutorily prohibit all forms of brick-and-mortar wagering. For the legislature in Utah, no amount of regulatory precaution is sufficient to justify exposing the community to the potential risks of gambling. As in Nevada, the legislature in Utah has acted consistently with the state’s traditional values with regard to gambling on the internet.
It is important that the states reclaim their right to make and enforce their own rules for gambling on the internet. It is not Constitutionally appropriate to apply a uniform set of rules to all of them. A state like Nevada must be free to regulate internet gambling as much as it reasonably believes desirable, but that means that a state like Utah must also must be free to restrict internet gambling as much as it reasonably believes desirable.
But prosecuting the player?…
Prohibiting internet gambling by making the operator a criminal is one thing, but making the player a criminal is another. It is difficult to prohibit an activity unless you sanction the player, but some might call it contrary to American values.
Consider the following statement by former Attorney General Robert F. Kennedy, supporting the Wire Act of 1961because it was carefully tailored so as not to criminalize common bettors.
“It should be clear that the federal government is not undertaking the almost impossible task of dealing with all the many forms of casual or social wagering which so often may be effected over communications. It is not intended that the act should prevent a social wager between friends by telephone. This legislation can be a most effective weapon in dealing with one of the major factors of organized crime in this country without invading the privacy of the home or outraging the sensibilities of our people in matters of personal inclinations and morals.”