Pic-A-State challenging the congress law on interstate transmission of lottery ticket information (1995)

Original Text:

Lottery tickets purchased in one state cannot be traded outside of that state in a number of American states. Pic-A-State purchased tickets in other states, and if the tickets were successful, Pic-A-State received a fee. In order to address this, Congress passed a rule that made this transaction unlawful. By virtue of this legislation, ticket information transmission was prohibited. The transfer of ticket data from one state to another was prohibited by Congress. This legislation threatened to shut down Pic-A-State’s operations, which led to a legal dispute. Parties, in this case, are Pic-A-State and the US Congress. The argument is about the law that the US Congress passed to hinder interstate sharing of lottery ticket information. What had happened is that the Pic-A-State was accessing ticket information from other states and receiving a commission where the tickets won.

Issue

Was the US Congress law on interstate lottery ticket information constitutional?

Law

In this section, attention is drawn to the United States law that governs interstate commerce. The interstate commerce deals with interstate trade and the movement of people, goods, money and other services. The sole regulator of the interstate commerce is the federal government. The power thereof is given by the United States Constitution. This law gives the federal government the power to regulate commerce within a state if in any case, it interferes with trade in other states.

The commerce clause was used to give determination to this case. In this clause, congress possess the legal authority and mandate to oversee trade with other nations, all states, and the Indian tribes. This law gives Congress a leeway to formulate and enact laws that govern businesses. The commerce clause in conjunction with the necessary and proper clause accords Congress supreme authority to regulate trade and commerce. These two clauses give the Congress all the legal power to enact laws that oversee the smooth running of all the departments of the federal government. The clauses work hand in hand to give the congressional authority over interstate commerce.

Analysis

In the 1824 case that was between Gibbons and Ogden, the chief justice Marshall was of the opinion that Congress was mandated by the Constitution to oversee the operations of interstate commerce. This was because interstate commerce brought together all the states.

According to the Supreme Court, state lotteries impacted greatly on the interstate commerce. In the 188 U.S.321, 354,23 S.Ct.321,326,47 L.Ed. 492 (1903) case, the court found out that lottery tickets and the transactions involved were closely linked with commerce. Therefore the movement of these tickets from one state to the other requires regulation. This could only be operationalized through interstate commerce. The Pic-A-State was not involved in the direct movement of lottery tickets across states however their transactions required regulation. The sale of tickets that were being done online required regulation.

The mandate given to Congress to oversee interstate commerce was not limited to the movement of physical commodities and people. It went beyond this to include conveying of information through the internet for the purposes of buying or selling lottery tickets.

The court also held that the Congress had the right through the passage of the law to uphold the sovereign power of the state to oversee lotteries. Federal laws should help check the operations of lotteries in all states. The states have the power to see to it that lotteries are properly managed within their states. The amendment therefore sought to strengthen 18.U.S.C. & 1301 which came into effect in order to regulate the buying and selling of lottery tickets.

Conclusion

The court ruled that the US Congress law on interstate lottery ticket information was constitutional. The regulation was a matter that fell squarely under interstate commerce and therefore it was necessary for Congress to regulate. The movement of the winnings across different states qualified it to be an interstate commerce issue.