If Gov. Deval Patrick represents the new face of liberalism in the Massachusetts Democratic Party, 14-term Congressman Barney Frank is the unabashed older version. But both men believe that government programs can improve the lives of citizens, and they are not hesitant to say that the government needs more revenue to fund them.
Patrick and Frank also have something in common when it comes to getting that revenue: They want to legalize gambling. Patrick’s high-profile plan would have legalized three casinos in different parts of Massachusetts. Frank has a bill that would, for the first time, legalize Internet gambling in the United States, while charging the Treasury Department with taxing and regulating it.
Patrick failed to convince a skeptical House Speaker Sal DiMasi that casinos make sense, though he had strong support from labor unions and mayors eager for the jobs and the tax revenues the casinos would generate.
Frank faces an even bigger challenge. His bill has only 46 of the 435 House members as co-sponsors, and as of now just three other members of the Massachusetts delegation (Bill Delahunt, Michael Capuano, and Jim McGovern) are backing him.
Where Patrick’s support of gambling was largely pragmatic — he wants the revenues gambling can generate — Frank’s push for expanded gambling also reflects his libertarian streak. Studies have shown that lower-income people tend to spend a disproportionate amount of their income on gambling, but Frank doesn’t believe this justifies a prohibition on the activity.
“If this is what lower-income people want to do with their money, who are we to tell them, ‘That’s stupid?’” he asks. “I believe in personal freedom. It’s as simple as that. I don’t understand how you can tell adults they can’t do this with their own money.”
Both the Bush and Clinton administrations have treated online gambling as illegal ever since the expansion of the Internet in the mid-1990s. The Justice Department cites the 1961 Wire Act, which prevents businesses from using a “wire communication facility” for interstate or international bets.
Even Patrick, when he announced his casino plan for Massachusetts, included a ban on Internet gambling. Kofi Jones — spokeswoman for Daniel O’Connell, the secretary of economic development and the governor’s chief adviser on the gambling issue — did not respond to requests for comment, but many observers speculate that the governor’s opposition comes from the fear that Internet gambling (should Congress authorize it) would drain revenue from casinos.
For his part, Frank supports Patrick’s casino plan, the Internet gambling ban excepted, and says Patrick should also get behind his bill.
Just as Patrick saw dollar signs in his casino plan, Frank estimates that taxing online bets could yield between $3 billion and $15 billion for the US Treasury over five years. Frank could not come up with a more precise estimate because his bill would allow states to ban their own citizens from gambling online and would give sports leagues the option of banning websites from taking bets on their games.
Even so, Congress is on record opposing online betting. In legislation passed two years ago, Congress cracked down on foreign websites that were not covered by the domestic ban on Internet gambling, barring US banks from processing credit card or check transactions for them. Almost every Republican voted for the bill, along with 76 Democrats, including two from Massachusetts (Stephen Lynch and Marty Meehan, who has since left Congress).
frank hasn’t taken much heat at home for his crusade, but he has heard from disgruntled activists elsewhere. Forty-three state attorneys general, for example, wrote to Frank in November to say they had “grave” concerns about his bill and expressed the view that it “would undermine states’ traditional powers to make and enforce their own gambling laws.”
Massachusetts Attorney General Martha Coakley did not sign onto the letter. But one of her predecessors, Scott Harshbarger, says he “understands completely” the position of the letter writers. Harshbarger, who vigorously opposes Patrick’s plan to build casinos in Massachusetts and sees legalized gambling as bad public policy, says Frank has walked into a minefield. “He’s walked not only into the gambling issue but into other areas surrounding the traditional powers of the attorneys general to regulate consumer protection issues within their own jurisdictions,” he says.
Bay State church leaders haven’t joined in the moral condemnation of Internet gambling that’s been common elsewhere. Even the group Casino Free Massachusetts, which was organized to oppose Patrick’s gambling plan, does not take any position on Internet gambling, says Laura Everett, a spokeswoman for the group and the associate director of the Massachusetts Council of Churches. She says the group’s opposition to the Patrick proposal was not based on moral grounds, but rather a differing vision for economic development. “This is about the direction we see our state going in and what sort of vision of Massachusetts we want to have,” she says.
Still, Tom Grey, a Methodist minister and national spokesman for the National Coalition Against Legalized Gambling, says that allowing people to bet online will create more gambling addicts than brick-and-mortar casinos ever could.
“I know Barney Frank says this is about personal freedom, that we should let people do what they want, but I think Congress was right to say we don’t want gambling coming into people’s homes,” he says.
Frank admits that it’s going to take a more vigorous lobbying campaign by supporters of Internet gambling to persuade his colleagues in the House to change their views. So far, his supporters are few, and Frank does not have the backing of the major lobbying group for US casinos, the American Gaming Association. The AGA is wary of any national regulation scheme (on its website, its says that the “the right of states to regulate gambling must be protected”) and prefers a House bill by Nevada Democrat Shelley Berkley that calls for a study of Internet gambling by the National Academy of Sciences.
Frank’s biggest supporters are foreign gambling sites, which have hired U.S. lobbyists to promote the bill, and a group of champion card players calling itself the Poker Players Alliance. That group has hired poker enthusiast and ex-New York GOP Senator Alfonse D’Amato to lobby for the Frank bill.
The congressman has also won backing from Charles Nesson, a poker enthusiast and Harvard law professor. Nesson believes that poker is an effective learning tool and since announcing his support for the Frank bill last year has even appeared on Comedy Central’s Colbert Report to make the point. “I have made it my mission to make poker legitimate,” he said on the show, adding, “It is one of the best tools we have to teach negotiation, risk assessment, strategic thinking, and other essential life skills.”
As Frank mounts his crusade for legalized Internet gambling, he stresses three points. First, he says, barring people from gambling on the Internet is a fruitless task. And in contrast to brick-and-mortar gambling, he argues, the Internet offers greater opportunities to track problem or underage gamblers. He says there is little or no safety net for problem gamblers who make regular visits to casinos, or to the local convenience store for lottery tickets, but regulations could require gambling websites to identify problem gamblers (flagged through accounts that are used too often or lose too much money in a short period), block them from making bets, and direct them to treatment programs. (Gambling opponent Grey, for one, says he doesn’t buy this argument.)
Second, the cost of banning Internet gambling could be enormous. The Bush administration has not yet released the terms of a compensation agreement it reached last December with Japan, Canada, and the European Union after the World Trade Organization ruled that the U.S. Internet gambling ban, because it makes exceptions for horse racing and a few other types of gambling, was a violation of free trade agreements. Some analysts say the compensation agreement with the other nations could stretch into the billions of dollars.
Frank’s third point is about money, and that’s where he and Patrick see eye to eye. Given the political difficulty that accompanies any effort nowadays to raise taxes, gambling revenues could be a godsend to underfunded programs across a wide array of government services, Frank says.
“If there are better ways to raise revenue, I will vote for them,” he says. “But it’s fairly clear in the current political situation that we won’t get much revenue by trying to raise taxes.”