Gov. Davis Legalizes Gambling, Again! Gambling and the Law™ by I. Nelson Rose
California Gov. Gray Davis professes he is against the expansion of legalized gambling. He may be, but you certainly wouldn’t know it by his actions. He is responsible for making the following forms of gambling legal in the nation’s largest state:
• Casino slot machines, from three-reel to video poker;
• Casino card games, including blackjack and Caribbean Stud;
• Off-Track (telephone) Betting (“OTB”) by Californians on horse races;
• Internet wagering by Californians on horse races;
• Telephone betting by residents of any state that allows interstate phone wagers, with OTBs in California;
• Internet betting by residents of any state that allows interstate online wagers, with OTBs in California;
• Telephone and online wagering on horse races taking place in California by anyone in any state with any OTB in any state.
The recent bill he signed into law goes into effect on January 1, 2002 depending upon how long it takes the California Racing Board to make regulations. This new law legalizes at-home betting by phone and, more significantly, by computer on horse races. Davis and California’s state legislators are master politicians. It would have been politically unwise to admit they were legalizing online wagers, especially when there were bills pending in the State Legislature and Congress to outlaw Internet gaming. So, they called it “advance deposit wagering.”
For almost a hundred years, California has had a law making it a crime to make, accept or record a bet on any “contest of skill, speed, or power of endurance of man or beast, or between men, beasts, or mechanical apparatus.” When horseracing was legalized in 1933, an exception had to be made for bets made within the “enclosure” of a licensed racetrack. To legalize Internet and phone gambling, excuse me, “advance deposit wagering,” the law had to be amended. The Governor and legislators resorted to subterfuge to avoid stating that they were legalizing at-home wagering. So, the new law declares: “Wagering instructions concerning funds held in an advance deposit wagering account shall be deemed to be issued with the licensee’s enclosure.” This is an extreme example of what is known as a “legal fiction.” By law then, if you make a bet with a racetrack using your home computer, you are not making a bet from your home—you are making a bet within the enclosure of the racetrack.
Last year Gov. Davis vetoed an almost identical bill, so why the change of heart?
Campaign contributions may have played a role. It’s no secret that Davis, considered to be one of the most aggressive political fund-raisers in the country, wants to run for President and has been known to reward his friends; like the time he overruled county supervisors and had a new freeway exit built to the front door of a big contributor, a tribal casino! It is also possible that Davis truly did not realize what “advance deposit wagering” really is. As his mishandling of the state’s energy crisis shows, he does not have the most competent of advisors. He was completely out-negotiated. He also approved incomprehensible tribal-state compacts, suggesting he did not have anyone around him who knew anything about legal gambling!
Gov. Davis also got bum advice from his legal advisors, including the State Attorney General, Bill Lockyer. Davis declared incorrectly in a news release that the law allowing “advance deposit wagering” was not an expansion of gambling because there had been a recent change in federal law. The federal law in question is the Interstate Horseracing Act and the only change was an amendment by Congress, which made it clear that an interstate wager was not prohibited by any other federal law, such as the Wire Act, but only if the bet was legal under states laws.
If California wanted to keep interstate betting illegal, it could do so. No other state found it necessary to change its laws. Gov. Davis’ attempt to use the change in federal law is a poor excuse on its face. These federal laws only apply if interstate commerce is involved. The main beneficiary of the new law will be California tracks, which can now take phone and computer bets from gamblers in and out of the state. There is no way you can say this is anything other than a major expansion of gambling.
Perhaps Gov. Davis is only against some forms of gambling. Although he allowed the tribes to have casinos and the tracks to have phone and Internet gambling, he vetoed a bill that would have allowed betting on mule races. His reason? It would be an expansion of gambling.
