In case you missed it, Sheldon Adelson, CEO of Las Vegas Sands, reached out to Senator Lindsey Graham (R-SC), this last Spring to strike a deal to ban online gambling. The gains from such an arrangement are of obvious benefit to Mr. Adelson; after all, online gambling constitutes a direct competitor to his enterprise.
But what about the gains to the good senator? Apparently he has other people’s interests in mind. As he put it, it helps a good friend and is agreeable to the social conservatives back home.
In particular, it seems that the Casino magnate has found an unlikely support group in the guise of resident Baptists. In Senator Graham’s own words, “Sheldon and the Baptists are one with this. The Baptists in South Carolina and Sheldon have become one person on this idea.” A match made in heaven indeed.
This peculiar match is actually nothing new. It is just one of many examples of the Bootlegger/Baptist theory of regulation in practice. This theory shows how moral interests (“Baptists”) and economic interests (“Bootleggers”) often align to fulfill mutually beneficial goals, as they once did with the prohibition of alcohol.
When an older generation of Baptists cried out against the abuse of spirits, bootleggers gleefully cheered them on in anticipation of unprecedented profit opportunities. It was only when these bootlegger interests became so apparent that even the political layman found Baptist outcries hard to swallow that Prohibition was overturned.
What makes this recent episode unique is that the political broker, Senator Graham, is so explicit about the reason for supporting this initiative. It is rare to see such a painfully obvious example of the Bootlegger/Baptist theory in practice. In fact, until this recent episode, the good Senator has shown little interest in the issue; that is, until Mr. Adelson did.
While supporting a bill banning online gambling may be easy in the land of the Baptists, it is really the Bootlegger that drives the underlying politics. As one congressman put it, this is simply a crass example of using the “government as their enforcement arm.”
From Sunday Blue Laws to environmental protection to health care reform, Bootlegger interests are often lurking in the background waiting to get their hands in the government till. The reason is that Bootleggers have so much to gain from government benefits and so much to lose when legislation goes the other way. What keeps these economic forces in check is the availability of moral cover for their actions. Put another way, a Bootlegger without a Baptist is like the emperor with no clothes. Lobbying for government for pure self-interest is a losing hand. But if a respectable front becomes available, then the sky’s the limit.
Therefore, we as political participants must be constantly vigilant for Bootlegger/Baptist arrangements. The Bootlegger is not usually as easy to find as the case of Mr. Adelson. Political brokers are keen on keeping these deals with Bootlegger interests under cover, in favor of displaying the Baptist support.
It may be easy for a South Carolina senator to oppose online gambling. But that doesn’t mean we should get swept up in the Baptist choir. After all, at the end of the day, the Bootlegger is left holding the collection plate.
The authors are respectively Assistant Professor of Economics, Johnson & Wales University and Professor of Economics Emeritus, Clemson University. They are authors of the September 2014 Cato Institute book, Bootleggers & Baptists: How Economic Forces and Moral Persuasion Interact to Shape Regulatory Politics.