Igaming Focus: Dodging one bullet, and maybe another

New U.S. Corporate Requirements, Section 230 and Igaming

“Remember that not getting what you want is sometimes an incredible stroke of luck.” — The Dalai Lama

About the last thing the U.S. Congress did in 2020 was to override President Donald Trump’s veto of the National Defense Appropriations Act. It was the first thing the U.S. Senate did in 2021.

Like all big and important budget measures, the NDAA is loaded down with extras, earmarks and quiet little arrangements that have nothing to do with the ostensible purpose of the law. So in addition to items like warship construction, pay raises for the troops and updates of veterans’ benefits, the bill provides for regulation of 5G technology, name changes for military bases named after Confederate generals, and requiring corporations and LLCs established in the United States to list their true owners, ostensibly for tax purposes.

For the igaming industry, however, the most important item was Section 230 of the Communications Decency Act. Overriding the Presidential veto means that Section 230 continues in force—and so long as it continues in force, it will be an important safeguard for Internet gaming worldwide.

Protection in cyberspace

It is said that no right, even a constitutional one, is unlimited or unconditional. But the general green light for free speech and expression is the closest thing the USA has to such an absolute right. Better 10 liars should go un-whipped, in American thinking, than one honest opinion should be suppressed.

At the same time, there is speech, and there is speech. Political opinions and religious declarations are left alone, so long as they do not advocate violence or harm to others. Commercial speech is a different matter.

Commercial speech, principally advertising, is subject to tighter controls than political/personal speech. This is principally because governments have a fundamental obligation to prevent harm to their respective citizens and residents, and must guard against misleading or deceptive promises and assertions. This does not mean, however, that government, especially state and municipal governments, are free to impose any restrictions they feel like.

The Supreme Court, in the case of Central Hudson v. Public Service Commission, 447 U.S. 557 (1980), lined out the circumstances under which commercial speech may be regulated or limited:

First, the contents of the speech in question must not be misleading, and must refer to a lawful product or service. Second, the government restriction under consideration must be in support of a substantial state interest. Third, if all that is so, the law or regulation in question must directly advance that stated government interest. And last, it must  be decided whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that government interest. (Id.. 447 U. S. 561-566)

How does the Section 230 squabble affect igaming?

If Section 230 finally goes away, then ISPs and other Interactive service providers may find themselves declared “publishers” rather than simple access services. And publishers can become liable for the content which they publish.

Right now, to be sure, the Section 230 controversy is mainly about political speech. Simply put, both sides of the political aisle seem to be at least considering the idea that the other sides’ content and commentary may be labeled “fake news” or “disinformation”. In other words, a brazen attempt to set aside the First Amendment protections of folks our side doesn’t like.

But ISPs also carry and host the sites of various igaming establishments. And while it would be a stretch to show that a given political opinion is causing so much trouble it should be suppressed, commercial speech—very much including advertising for igaming and hosting or allowing of gaming site—could be suppressed much more easily. After all, gambling is listed as a potentially harmful activity in many state statutes and court cases, both here in the USA, and across the world.

The open legal protection of ISPs and interactive computer services is probably the biggest single factor in allowing igaming to grow—for that matter, to exist at all. If it is removed, even by well-meaning parties, the results may be much more far-reaching and destructive than anything we have seen. To be sure, it is not yet a fiery threat against the igaming industry. But the time to worry about potential problems is while it makes a difference whether you’re worried or not.