When Congress Shouldn’t Act: Let States Advance Economic Growth and Protect Consumers
By J. Gary Pretlow As Congress drags its feet on a number of issues, there has been a flurry of policymaking taking place in states around the country. State Legislatures like ours in New York are taking the lead in advancing proposals to enhance economic growth, empower our local economies and keep consumers safe. That is why it is particularly troubling that one thing some members of Congress are intent on passing is legislation that would ban online gaming nationwide. The proposal currently being considered in the House — the Restoration of America’s Wire Act — would prevent states from deciding for themselves how to regulate gaming and online lotteries, prevent us from capturing the potential for economic growth these systems offer and tie the hands of our law enforcement when it comes to protecting consumers online.
As the chairman of the New York State Assembly Committee on Racing and Wagering, I have carefully watched the issue of online gaming evolve in recent years. As nearby states such as New Jersey and Delaware have adopted well-regulated systems, they’ve seen a corresponding increase in tax revenue, and the security technology they have employed has not only kept gaming safe within their borders, it has created a legal system where law enforcement can crack down on the fraud and any other illegal activity that currently runs rampant in the robust online black market.
In New York, we are considering bills to allow online poker; similar discussions are taking place among policymakers across the country. These proposals are responsible and reflect the very core of what we should be doing: leveraging business opportunities to help our state. In New York, our lottery helps to fund education — to the tune of $3.11 billion dollars in fiscal 2014-15 alone. That’s 14 percent of our state’s overall funding to educate over 2.7 million students. RAWA would ban online lotteries, risking education dollars in New York and over a dozen other states around the country.
What’s more, lotteries are only one source of revenue for the state that would be impacted by RAWA; in New York we could leverage tax revenue from legal online poker to invest in the programs that matter most to New Yorkers. As states continue to recover from the recession and grapple with budget shortfalls, the steady growth of gaming revenue cannot be responsibly overlooked. Last year, New Jersey’s online gaming tax revenue was $122 million, and Delaware took in almost $2.1 million. Between 2014 and 2015, New Jersey saw an over 12 percent increase in revenue. New York recently expanded brick and mortar casinos in order to compete regionally, and we may make similar strides online.
In addition to the economic benefits, we should be identifying the best possible way to protect online consumers. Simply banning online gaming will protect no one other than the criminals currently running a thriving online black market. Estimates show that one million consumers spend upwards of $3 billion annually in this illegal overseas market, and our local and federal law enforcement officers are powerless to protect them from fraud and abuse.
Prohibition doesn’t work, it merely exposes children and consumers to a system primed to exploit them. What does work? A well-regulated and highly advanced system based on secure technology and fully integrated with our law enforcement’s needs. New Jersey’s geolocation technology has been enormously successful and has ensured that users are of legal age and within the borders of the state. Were RAWA to pass, we’d have no such technology to help keep vulnerable consumers safe.
The equation should be simple: if we can find a way to promote economic growth and protect consumers, we should do it. New York, and every state, deserves to be able to determine what gaming exists within its borders and how it is regulated — we always have had that right and it defies logic that Congress would step in now to undercut it. Congress should focus on the things that will help states, not those policies that aim to take away our power to do right by our constituents.
Assemblyman J. Gary Pretlow is a Democrat who has represented New York’s 89th district since 1992. He serves as chairman of the New York State Assembly Racing and Wagering Committee.