No On-line Gambling for You, Minnesotans

Minnesota’s Department of Public Safety has instructed the state’s ISPs to block access by state residents to a list of gambling sites, claiming authority under the Wire Act (18 U.S.C. 1084). The Department’s theory is that 1) gambling is illegal in Minnesota, and 2) the Wire Act requires common carriers to stop furnishing services to such unlawful Web sites. Here’s the relevant text from the Wire Act (18 U.S.C. 1084(d)):

When any common carrier, subject to the jurisdiction of the Federal Communications Commission, is notified in writing by a Federal, State, or local law enforcement agency, acting within its jurisdiction, that any facility furnished by it is being used or will be used for the purpose of transmitting or receiving gambling information in interstate or foreign commerce in violation of Federal, State or local law, it shall discontinue or refuse, the leasing, furnishing, or maintaining of such facility

There are at least three reasons why this won’t fly (or float? Need to work in a “Land of 10,000 Lakes” joke here). First, ISPs aren’t common carriers. Second, the Minnesota order is likely unconstitutionally overbroad. Third, there’s a serious dormant Commerce Clause problem given the financial repercussions for ISPs. In short, this attempt is like Brett Favre’s career: dead no matter how hard interested Minnesota parties try to revive it.

First, the common carrier problem: in National Cable & Telecommunications Association v. Brand X Internet Services, 545 U.S. 967 (2005), the Supreme Court deferred to the Federal Communications Commission’s ruling that, under the Communications Act of 1934, cable broadband providers are “information service providers” and not “telecommunications carriers.” Hence, cable broadband isn’t subject to common carrier regulation. The case doesn’t directly address DSL broadband, but the FCC’s logic likely applies there as well. So, the basis for Minnesota’s invocation of the Wire Act – that ISPs are common carriers – seems to run counter to both the Supreme Court’s holding and the FCC’s rulemaking. But what do they know?

Second, this situation looks a lot like Center for Democracy & Technology v. Pappert, 337 F. Supp. 2d 606 (E.D. Pa. 2004). There, a Pennsylvania law required ISPs to block access to sites pinpointed by the state Attorney General (that allegedly contained child pornography). The ISPs responded by blocking the IP addresses of the offending sites. Result: massive overblocking – the ISPs filtered about 1.1 million innocent sites to squash 400 bad ones. Minnesota ISPs might use IP blocking also, since URL filtering is expensive (see next point). Declan McCullagh notes that, a blacklisted site, shares an IP address with Cashcade, a corporate site. The blacklist is underinclusive – does anyone think the Dept. of Public Safety has found all of the Internet gambling sites? – and overinclusive – because gambling companies will migrate away from blocked URLs, and because IP blocking always catches up unrelated sites.

Finally, the Wire Act itself, and the burden URL filtering would place on ISPs, creates a major dormant Commerce Clause problem. The Constitution’s Commerce Clause gives Congress power to regulate interstate and international commerce; importantly, it also keeps individual states from doing things that overly burden this commerce. The Wire Act shows that Congress is already regulating interstate gambling issues, meaning that states are likely pre-empted from tackling the same problem. Moreover, as the Pappert court noted, it’s quite expensive for ISPs to install URL filtering technology (at 629-34). There’s rarely a single “choke” point in the network where one can put a filter in place, and effective filtering usually slows network transfer speeds. (Australia is grappling with exactly these problems.) Thus, if Minnesota forces ISPs to adopt costly technology to meet its local gaming preferences, that’s clearly a burden on interstate commerce. (See Pappert at 645-46.) Since blocking doesn’t fall within Congressional authorization under the Wire Act, it probably runs afoul of the Commerce Clause.

I think this is bad law and benighted policy. If it gets to a court challenge, I’d be delighted to collaborate with other cyber-folks on an amicus brief explaining exactly why this is. So, I’ll give odds: 2:1 says the Department quietly drops this plan; 1:1 the ISPs politely refuse to comply; 1:2 Brett Favre signs with the Vikings, whose fans quickly come to appreciate Tavaris Jackson

[Oh no! Now they’re filtering Info/Law!]

Update (5 May 1:00PM): I thought it might be helpful to list the 11 ISPs: Charter Communications, Comcast Cable, Direct TV, Dish Network, EMBARQ, Qwest, Sprint/Nextel, Verizon Wireless, AT&T Internet Services, Wildblue, and Frontier all received notices; the FCC received a copy as well.

10 Responses to “No On-line Gambling for You, Minnesotans”

  1. Here’s another question: why is Minnesota trying this approach, when some ISPs appear willing to block content voluntarily? Qwest voluntarily agreed to New York’s request to filter child porn sites. Of course, gambling is not child porn, and it’s easy to get things you ask for when there’s an implied threat behind it, but I wonder why Minnesota started here instead of just asking nicely.

  2. I think the difference is that the NY ISPs didn’t agree to block sites – see this post:

    What they did agree to do is to stop hosting Usenet groups, which were a money-loser for them anyway. So, it helped them both financially and PR-wise to drop Usenet based on AG Cuomo’s demands.

    In MN, the ISPs would have to engage in either IP blocking or URL filtering, both of which are 1) potentially overbroad, 2) costly, and 3) likely to irritate users. I don’t think a friendly request would be as well-received here, but I never underestimate how polite Midwesterners are…

  3. I was thinking of a different agreement: Qwest’s use of the National Center on Missing and Exploited Children’s blacklist to actively block web sites. For some reason I thought that was also prompted by the New York AG, but it seems not.

    That doesn’t change my point, though—it just means Qwest volunteered to filter without even the veiled threat of state action.

  4. I worry about hanging one’s hat on the not being a common carrier aspect. ISPs SHOULD be considered common carriers, and should that day come when they are I wouldn’t want to see these kinds of laws suddenly become ok.

  5. @Jim G: I share your worries about private agreements to filter. This has been the model in many Western European countries, and because it’s “voluntary,” there are likely fewer protections for users than when the government mandates filtering. (This varies, of course, with each country’s balance of protections of speech from public / private interference.) There’s much to be said for the transparency and accountability of public law.

    @Cathy: I’m with you that the common carrier argument shouldn’t be the only reason to reject this type of filtering. Our policy on Internet gambling has gotten us into hot water with the WTO (on a challenge from Antigua), and filtering is a poor way to deal with the problem even beyond this concern. I think I also want ISPs to be common carriers, but I’m not expert enough in telecom law to feel totally comfortable saying that without doing a bit more research…

  6. […] Department of Public Safety has withdrawn its effort to compel the state’s ISPs to filter ~200 gambling Web sites, in the face of a lawsuit filed by iMEGA. State officials are maintaining a brave (poker) face, […]

  7. I think this is really a brave decision.Online gambling is really getting many people into debts.This can avoid cheating at least in that place.

  8. Derek I agree that the block won’t work…I could go into the 1001 examples of prohibitions that have been totally ineffective…including of course the UIGEA that is universally regarded as failing to curb online gambling.

    But the comical fact in this case, is that a good portion of the sites on the Department of Public Safety ‘s list actually didn’t accept US players anyway – highlighting the lack of research and thought that went into this botched initiative. Included on the list was PartGaming – who only weeks before had settled with the US Justice Department in a high profile case and whose no US player Policy is known by everyone….accept the Department of Public Safety it seems.

    Sorry Rakeback but I just had to point out the obvious – your concern for problem gamblers is a little nonsensical given the fact that you run a gambling site trying to promote the activity to players.

  9. How can you claim authority under the Wire Act when that applies to getting money on the site? It doesn’t have anything to do with actually playing online.

  10. The situation created by Governor Beshear of Kentucky regarding internet gaming domain names also speaks to finding ways of curtailing gaming at the state level. Beshear filed a suit against multiple offshore gaming sites, charging that any patronage from the citizens of Kentucky amounted to “theft” of state revenue. Accordingly, Beshear believed that seizing the domain names of these websites would end the problem of lost tax dollars.

    In the end, the Kentucky Courts saw the light and sided with the gaming companies (represented by legal counsel and iMEGA), declaring that the state had no jurisdiction over domains of companies located outside the state, let alone outside the country altogether. This was a small but important victory for online casino gaming sites around the world, no matter what country they use as their target demographic.

    People can get around ISP blocking using proxies and vpn networks. If Minnesota really wants to curtail online gaming, they should work on the demand side of the equation instead.