Justice opinion says ‘Net gambling is illegal

November 15, 2021


CARSON CITY — The vision of Nevada casinos of finding a new bonanza by using the Internet to accept bets from other states and foreign countries may have been shot down by the Justice Department.


The Justice Department has issued an advisory opinion that the federal wire act prohibits communications across state lines or to foreign counties for placing bets.


Chairman Dennis Neilander of the state Gaming Control Board said Thursday the opinion reaffirms the long-held opinion of the Justice Department. The Clinton administration had opposed Internet gambling, and Nevada wanted to see if the Bush Administration held the same position, Neilander said.


At the urging of Las Vegas casinos, the 2001 Legislature authorized Internet gambling in hopes of expanding revenue coming into the state. But there has always been a question whether that would violate federal law.


Assistant U.S. Attorney General Michael Chernoff told Neilander in a letter dated Aug. 23: “As set forth in prior congressional testimony, the Department of Justice believes that federal law prohibits gambling over the Internet, including casino-style UFABet gambling.”


Bill Bible, president of the Nevada Resort Association, said this opinion was not unexpected.


While he was a member of the National Gambling Commission, Bible said, the Justice Department held that view.


He said the industry approached the Legislature to get clearance in case the federal government changed its mind so that Nevada casinos would not be left “in the dust,” he said.


Bible said there are bills in Congress that seek to clarify the law. He said he expected the federal law to be clarified by the courts, where several cases are pending.


The control board has delayed any action on Internet gambling until it gets a clear picture of what the Department of Justice feels.


The board will continue to look at other options that might be available to the casinos, Neilander said.


For instance, there may be Internet gambling allowed just within Nevada. Another possible option is that a hotel guest who is in his room might be able to use an interactive system to place a bet in an adjacent casino — or a gambler with a Palm Pilot in Nevada might be able to make a wager.


In the meantime, Las Vegas gaming giants Park Place Entertainment, MGM MIRAGE, Venetian owner Sheldon Adelson and Station Casinos Inc. continue to explore Internet gambling opportunities overseas in nations where such gambling is legal.


The Sun published an Associated Press story, “Nevada’s casino industry addresses problem gambling,” that led with a claim about the prevalence of pathological gambling in Nevada compared to other states. While I recognize it makes for a more intriguing story line, there is, in fact, evidence from the same study — and another more recent study — contradicting that claim.

The Nevada prevalence study completed several months ago included two dramatically different sets of estimates for the prevalence of problem and pathological gambling among Nevada adults. If you rely on the number derived from a screen the author herself discredited as a research consultant to the National Gambling Impact Study Commission, about 3.5 out of 100 Nevada adults could be considered current “probable pathological gamblers.” The other screen — based on a more current understanding of the diagnostic criteria for pathological gambling — determined that three out of 1,000 Nevada adults could be considered current pathological gamblers.


Using this updated screen, the prevalence of pathological gambling in Nevada (0.3 percent) would appear to be on par with or perhaps even lower than national estimates (0.6 percent). Comparing Nevada’s rate to other states, a study released earlier this year in Florida using the same updated screen found that the prevalence of pathological gambling there was 0.7 percent — more than double that found in the Nevada prevalence study.


Whatever the prevalence rates, we recognize as an industry — and as a community — that we have an important job in educating employees, customers and the general public to try to prevent future incidences of pathological gambling. At the same time, however, news organizations only perpetuate misinformation when they publish sweeping, undocumented conclusions on very complex topics.


FRANK J. FAHRENKOPF JR. Editor’s note: The writer is president of the American Gaming Association.