The U.S. online poker community has been on high alert ever since Senator Lindsey Graham added anti-online gambling language to an appropriations bill passed earlier this month by the United States Senate.
Graham’s support for an online gambling ban wouldn’t have the force of law if the bill was passed, but several watchdog groups noted it could open the door for a last-minute amendment to the bill that would ban online gambling; an amendment that would occur too late in the process to be stricken from the bill.
It would take a perfect storm of parliamentary maneuvering for Graham’s anti-online gambling language to become law. But the threat was there, as Graham managed to get the following passage written into the Senate version of the bill:
“Since 1961, the Wire Act has prohibited nearly all forms of gambling over interstate wires, including the Internet. However, beginning in 2011, certain States began to permit Internet gambling. The Committee notes that the Wire Act did not change in 2011. The Committee also notes that the Supreme Court of the United States has stated that ‘‘criminal laws are for courts, not for the Government, to construe.’’ Abramski v. U.S., 134 S.Ct. 2259, 2274 (2014) (internal citation omitted).”
Fortunately, it all fell apart for the Graham, and other like-minded politicians on Tuesday, when the House of Representatives failed to include the same type of anti-online gambling language in its version of the appropriations bill. However, this failure was not for a lack of effort.
Rep. Charlie Dent (R-PA) did try, but ultimately failed, to get similar language included in the House version on Tuesday:
Dent espousing the typical unproven myths that ignores how regulated online gaming really works.
— PokerPlayersAlliance (@ppapoker) May 24, 2016
Ultimately, Dent withdraws his amendment. Equivalent as failure. We win. RAWA loses! Thank you for taking action to defeat this effort!
— PokerPlayersAlliance (@ppapoker) May 24, 2016
Is this the death of RAWA?
Myself and others have declared RAWA dead several times over, but truth be told, the bill won’t officially die until another populous state legalizes online gambling, thereby creating a tipping point of sorts for legalized online gambling in the country.
Congressional supporters of the Sheldon Adelson-inspired Restoration of America’s Wire Act (RAWA) bill have tried to pass RAWA at several different points over the past two years, but have failed each time. With little support on either side of the aisle, RAWA advocates have mainly resorted to a UIGEA approach, as they’ve tried to get the bill included in a larger, must-pass, piece of legislation.
Until legalized online gambling is passed (perhaps in Pennsylvania, New York, Michigan or California) there is always a RAWA threat looming; there is always a big piece of legislation that RAWA could weasel its way into.
Vigilance is required
I’m not overly concerned about RAWA (considering the bashing the bill has taken during hearings and the tremendous amount of opposition to the bill from all corners of the political spectrum). However, I’m also pragmatic, and even if you’re up by four touchdowns with just eight minutes left to play in the fourth quarter, you don’t stop playing defense.
In its most recent letter of opposition, a coalition of right-wing and libertarian groups noted the bipartisan opposition:
“The RAWA legislation was met with strong bipartisan opposition ranging from free market and limited-government organizations like ours to organizations like the National Governor’s Association, the National Conference of State Legislators and the North American Association of State & Provincial Lotteries. As such, the bill failed to move past the committee hearing stage.”
The coalition also noted the legislative chicanery RAWA advocates have attempted to use to get their way:
“This clearly is an attempt to circumvent regular order in the House and Senate. We are deeply concerned that this language has been inserted to be used as a placeholder for “air dropping” RAWA in a conference report, whether it be the CJS Appropriations bill, an Omnibus or a Continuing Resolution, as a way to deny the American people the ability to have their direct say in a fundamental legislative shift that limits individual rights. The process of regular order safeguards those rights by allowing for an open and meaningful discussion to occur.”
The bottom line is this: RAWA may be a long shot, but it’s not a laughing matter.
The best way to ultimately defeat RAWA is for more states to pass legislation legalizing online gambling.
It’s not much of a stretch to say some of the talking points used by RAWA supporters over the years aren’t exactly grounded in reality, but Nevada Attorney General Adam Laxalt’s logic may be the most flawed of them all, as he seems to be supporting the bill while at the same time making a strong case against it.
Laxalt is a recent and surprising RAWA supporter (with ties to Sheldon Adelson), and since the bill could upend several industries in his home state of Nevada, he’s received a lot of pushback from the likes of Governor Brian Sandoval and Nevada Gaming Control Board chief AG Burnett.
This blowback led to Laxalt recently couching his support in a letter he penned to the leadership of the House Judiciary Committee, and in doing so he completely undermined everything RAWA stands for.
Laxalt said in part:
“With regard to Nevada-licensed Internet gaming operators, both current and past, I am unaware of any evidence to suggest that the foregoing description applies. On the contrary, I would note that Nevada’s gaming regulatory agencies are the finest in the world and have required any person or entity, prior o deploying any Internet-based or related technology, to submit to exhaustive background and business probity investigations. I am confident in the work of Nevada regulators to ensure the quality of Nevada gaming licensees. With regard to unlicensed Internet gaming, I share the potential concerns expressed in the RAWA letter.”
What Laxalt appears to be saying is Nevada (and one would suspect other august regulatory bodies) is capable of regulating online gambling activities, but he’s supporting RAWA (which would ban state regulated online gambling) because of concerns of unregulated online gambling… which is currently filling the void in any state without licensed online gambling operators.
Laxalt went on to say [bold mine]:
“while I agree with the spirit of RAWA- recognizing the quasi-legislative impact of the 2011 Opinion and the resulting need for Congress to review and opine on the reach and application of the Wire Act- I also believe that it is incumbent upon the policymakers of Congress to protect current and future technological innovation of licensed and regulated gaming-related devices, table games, accounting, financial, and player reward systems, as well as other systems and networks central to the success of land-based casino resorts, from any prohibition that may result from overly broad amendment language to the Wire Act of 1961.”
I’m not sure the attorney general understands what a prohibition is, or the finality of passing RAWA in its current form.
The Las Vegas Review-Journal summed up Laxalt’s paradoxical stance thusly:
“Laxalt offered an additional “point of clarification” to the AG’s letter, which stated the Wire Act changes opened the door to money laundering and other nefarious activities. He credited Nevada’s strict gaming regulatory structure with keeping those elements out of the Silver State and said he was “unaware of any evidence” to the contrary.”
Long history of head-scratching statements
Laxalt isn’t the first RAWA supporter whose had a hard time making sense of their talking points, and wound up twisting themselves into the proverbial pretzel. The Coalition to Stop Internet Gambling (CSIG) has long struggled to explain their stance.
Repeatedly telling people the sky will fall if something that already exists (and to date hasn’t led to the sky falling) is allowed to come to fruition is disingenuous enough, but throw in the carveouts for some forms of online gambling/wagering like fantasy sports, horse racing, sports betting, and potentially lottery, and it would appear that their hypocrisy knows no bounds.
It’s even worse when they argue brick & mortar casinos can better detect problem gambling, underage gambling, or money laundering; something law enforcement and problem gambling groups dispute. Or when they say that technology to ring fence a market doesn’t exist minutes after a company like GeoComply demonstrates this very technology in action.
Their arguments include:
- Technology works here (to ringfence online sportsbetting in Nevada), but not here (to ring-fence online poker in Nevada), even though it’s the same technology.
- Sure Nevada, New Jersey, and Delaware have offered legal online gaming for over two years, but what proof do we have that it works?
But it gets worse.
At a hearing in Pennsylvania, Sheldon Adelson henchman Andy Abboud tried to argue that because there are no documented cases of underage gambling in the regulated online gambling markets this is a clear indication it’s happening.
And then there was Willie Brown, who while fighting for a federal prohibition got so turned around in his own arguments that by the end of the debate he was essentially making the case for legalizing and regulating online gambling, much like Laxalt is unwittingly doing in his letter.
The cavalcade continues
One would think expert witnesses would look into the matter before regurgitating claims, but at Wednesday’s RAWA hearing two witnesses (as well as several politicians) continued to try to jam square pegs into round holes.
Based on their prepared testimony, Douglas County Attorney Donald Kleine and South Carolina Attorney General Alan Wilson have adopted CSIG talking points wholesale.
Wilson argues that RAWA (a FEDERAL prohibition of online gambling that takes the decision away from the states) protects state’s rights.
Kleine has adopted the position that legalizing online gambling would somehow overburden law enforcement, even though his state is currently serviced by illegal online gambling operators. As was first reported by CEI’s Michelle Minton, Kleine, like most RAWA supporters, has strong ties to the architect of the federal online gambling ban, Sheldon Adelson.
US Poker will post continuous updates of the hearing taking place in front of the House Committee on Oversight and Government Reform where the topic of discussion will be online gambling, with a focus on law enforcement implications.
The hearing, with the dubious title of A CASINO IN EVERY SMARTPHONE – LAW ENFORCEMENT IMPLICATIONS. is scheduled to begin at 1 PM EST, and will be chaired by Jason Chaffetz (R-UT), the sponsor of the Restoration of America’s Wire Act (RAWA) bill in the House of Representatives.
The witness list for the hearing can be found here.
Hearing is being delayed due to floor votes in the House.
Looks like we are going to have a series of delays with floor votes starting now in us house.
— PokerPlayersAlliance (@ppapoker) December 9, 2015
According to John Pappas of the PPA, Chaffetz has just arrived, and members are finding their seats.
Hearing is now underway.
Chaffetz is offering up a quick summary (from his vantage point) of the Wire Act and the 2011 decision by the Office of Legal Cousel to limit the Wire Act to sportsbetting.
Chaffetz says the reversal has caused “confusion.” Unfortunately, the reversal clarified the Wire Act and how it applies to online gambling.
Chaffetz doesn’t want gaming to come to Utah. He wants state to have that right – which is strange that he’s advocating for a federal ban that takes away the state’s right to choose.
Chaffetz foolishly citing FBI letter, when FBI spokesperson will soon testify and set the record straight.
Chaffetz argues in opening remarks that the entire opinion by OLC is based on a single comma.
Elijah Cummings wants to “know what is going on here” as they’re hearing from both sides with everything they’ve got.
“Let’s not kid ourselves, this is a lot about money,” Cummings notes. “Whatever we do we want to be fair.”
Cummings has yielded most of his time to Rep. Watson Coleman from New Jersey.
Watson Coleman voted for online gambling as member of New Jersey legislature, and is refuting Chaffetz’s remarks. “Legal states have not seen an increase in law enforcement challenges.”
Watson Coleman showing slides of geolocation technology; clear refutation of Chaffetz’s claims that the Internet can not be closed off.
Ms Watson-Coleman is incredibly well spoken on the safety of regulated iGaming, and it's ability to effectively protect consumers.
— PokerPlayersAlliance (@ppapoker) December 9, 2015
Chaffetz introducing witnesses – The witness list for the hearing can be found here.
FBI rep Campbell offering testimony.
Campbell is essentailly reading from old FBI letters on potential for money laundering at illegal online gambling sites.
Mr Campbell at no point in his introduction spoke about any regulated online gaming site being a criminal threat. Only offshore unregulated
— PokerPlayersAlliance (@ppapoker) December 9, 2015
South Carolina AG Wilson is up; he’s a strong supporter of RAWA and feels the 2011 OLC opinion should have been decided legislatively.
Wilson wrongly states that the Wire Act reversal legalized online gambling.
Hearing officially off the rails as Wilson talks about mothers leaving children in cars to die while they played video poker.
Wilson says state cannot protect citizens from online gambling, even in states where it’s already available (from offshore illegal operators).
Attorney Douglas Kleine testifying. Says online gambling puts undue burden on law enforcement.
I don’t know why Kleine wants to prosecute LEGAL online gambling sites?
Kleine, a non-expert on this topic, is spending a lot of time talking about problem gambling issues.
Former NGCB Chair Mark Lipparelli now speaking about enacting regulations for Nevada’s legal online poker industry.
Lipparelli notes the committee could turn to experts with hands on knowledge. “We are no longer in the Greenfield” we have concrete knowledge that can replace speculation – like the things previous witness have stated.
Lippareli: "The 3 existing US markets have now applied their knowledge to actual operations and historical speculation" has been discarded.
— Dan Cypra (@cypradn) December 9, 2015
Lipparelli compares ongoing process of regulation of iGaming to traditional casino regulation. You live, you learn, and you adjust.
Lipparelli is ignoring previous (outlandish) witness testimony and focusing on facts, intimating their fearmongering is not even worth considering to committee. This is similar to state level hearings, the crackpots get their 5 minutes and are then ignored – hopefully the case here.
Lipparelli says he was concerned early on, but time with experts gave him confidence in regulated market.
Lipparelli: “I can give you confidence that the regulated market model does work."
— Donnie Peters (@Donnie_Peters) December 9, 2015
Chaffetz introduces letter from 2014 from 16 State AGs instead of the 2015 letter that has 8 signatures, more on that here.
Kentucky Rep. Massie asking FBI how prevelant criminal activity in online gambling is. Campbell notes one case, but gives hypothetical. Massie notes, “you’re not aware of ANY cases involving terrorism and online gambling?” and asks why states can’t just pass laws to handle online gambling. Lipparelli notes state law already prevails.
Massie has serious 10th Amendment misgivings about federal online gambling ban.
Rep. Watson Coleman asks FBI if they’ve had any issues with regulated online gambling sites.
FBI’s Campbell likes hypotheticals, and is trying to avoid saying that there is no evidence of online gambling being a law enforcement problem.
Not sure how FBI witness isn't prepared to answer questions about # of past prosecutions related to online gambling. #RAWA
— Dustin Gouker (@DustinGouker) December 9, 2015
Watson Coleman doing a good job of separating regulated from unregulated online gambling. Now asking Lipparelli what is in place at regulated online gambling sites to help CATCH money laundering.
Lipparelli notes everything in regulated markets is completely transparent and his opinion “If you were going to try to launder money a legal regulated site is the last place you would want to do that.”
We may have found our new iGaming champion in Congress, Representative Bonnie Watson Coleman.
Representative Mulvaney having trouble squaring the RAWA circle of making something states want illegal, illegal… yet it would make things state’s (NJ, Nevada, and Delaware) want legal, illegal?
So far, no member of committee other than Chaffetz is buying the RAWA argument.
Cummings comes off the top rope and asks “If we outlaw online gambling will B&M casinos make more money?” Nobody refutes, and Cummings basically says this is about money, and seems to be coyly speaking about RAWA supporter Sheldon Adelson.
Mr Chaffetz is visibly upset with the direction of the hearing and his fellow Republican colleagues question. Heated sidebar going on
— PokerPlayersAlliance (@ppapoker) December 9, 2015
Lipparelli, illegal site are readily available, and it’s not going to change. Once again tries to create space between regulated and unregulated online gambling. Cummings makes same point, and FBI’s Campbell stumbles over his answer – Cummings cuts him off and throws question to Lipparelli.
RAWA hearing going same as state hearings, lawmakers start to realize some witnesses are not serious and ignore or challenge them
Lipparelli notes that the original interpretation of the Wire Act as it applies to online gambling was also a DOJ opinion, and not a law.
Georgia Rep. Hice (whose state has legal iLottery), like Cummings, is not suffering fools lightly, and cutting off non-answers: “that’s not my question,” and moving down the line until he gets someone to answer his question about state’s rights.
Telling point: Rep. Hice R-G., a pastor "opposed to all forms of gambling" says RAWA "flies right in the face" of the US Constitution #RJnow
— Howard Stutz (@howardstutz) December 9, 2015
Hearing in recess.
Several representatives give their opinions on RAWA and ask questions:
- Rep. Lynch (Mass.) says that RAWA would simply push online gambling offshore, rather than bringing it into line with the law.
- Rep. Titus (Nevada) questions witnesses, including the FBI’s Campbell, who has no examples of online gambling being used for criminal activity. She also questioned the idea that RAWA is somehow a bill that strengthen states’ rights, calling it “jabberwocky.” Lipparelli goes on to describe how Nevada iGaming sites block players from other states.
- Rep. Walker says he’s “conflicted” about RAWA because of the Tenth Amendment.
- Rep. Lieu ridicules the idea that you can’t locate someone accurately for online gambling. points to GPS in phones, says testimony of witnesses (other than Lipparelli) is wrong. A video from GeoComply is shown.
- Rep. Grothman, a RAWA co-sponsor, asks about the “evils of gambling” and if there is more online gambling because of increased access.
- Rep. Chaffetz, refuting the idea that online gambling has not been used in criminal cases, enters a Washington Post story into the record.
- Rep. Palmer brings up access of online gaming to minors, and the potential harm it can do.
Chaffetz wraps up the hearing, trying to put forth his views, and questioning Lipparelli on the efficacy of state regulation.
On Wednesday, the House Committee on Oversight and Government Reform will host a hearing to discuss Jason Chaffetz’s (R-UT) proposed ban of online gambling, the Restoration of America’s Wire Act.
The hearing has the not-so-subtle and leading title of: A CASINO IN EVERY SMARTPHONE – LAW ENFORCEMENT IMPLICATIONS.
This is the second RAWA hearing Chaffetz has conducted this year, and while the hearing has been in the works for over a month, it was only confirmed last week and it wasn’t until today that we got our first look at the invited witnesses.
The off the rails hearing
In March, Jason Chaffetz stacked his hearing with witnesses who were decidedly anti-gambling, and their anti-everything stances, accompanied by their hypothetical what-ifs, led to the hearing quickly spiraling out of the realm of facts and into fantasyland.
Based on the witness list for tomorrow’s RAWA hearing, this doesn’t seem like it will be an issue this time around.
Here is an overview of the four announced witnesses, and how their testimony may go.
Mr. Joseph S. Campbell, Assistant Director FBI Criminal Investigative Division
Law enforcement will be represented by the FBI’s Joseph Campbell, who will likely face a number of leading questions from Chaffetz about the potential for money laundering based on an older FBI letter that RAWA supporters like to hold up (but don’t really want you closely examining). However, if Campbell, or perhaps Mark Lipparelli, are able to expound on these concerns, it will be a win for legal, regulated online gambling supporters.
This isn’t the first time law enforcement has testified at a congressional online gambling hearing, and generally they are expected to remain neutral and factual in their responses.
Mark Lipparelli, Nevada State Senator and former NGCB Chairman
Before, during, and after his March hearing Chaffetz was also criticized for hosting a hearing about legal online gambling and not inviting someone from one of three states with legal online gambling – Nevada, Delaware, or New Jersey – to provide unique firsthand knowledge.
Chaffetz appears to have remedied this by inviting Mark Lipparelli, a current Nevada state senator who was the chairman of the Nevada Gaming Control Board from 2011-2012 and helped craft the state’s online poker regulations.
Based on his experience in Nevada, Lipparelli will be able to provide a real-world assessment of online gambling, from legislation, to crafting regulations, to rollout, to the difference between regulated and unregulated markets. For an idea of his views, here is a 2013 interview Lipparelli gave to Online Poker Report on the topic of U.S. online gambling.
This won’t be Lipparelli’s first time explaining the legal online gaming process either, as he was part of a panel discussion at the 2014 East Coast Gaming Congress titled Lessons Learned: Takeaways from the Launch of iGaming in US Jurisdictions. Lipparelli is a regular attendee and speaker at gaming conferences.
Alan M. Wilson, Attorney General of South Carolina
Alan Wilson will be decidedly pro-RAWA, as he is one of eight attorneys general who signed their names to a letter supporting a RAWA-style federal ban of online gambling. A lot will likely be made of this support by Chaffetz, but when it’s put into context, it becomes quite apparent that a federal online gambling ban is losing support among state attorneys general.
— PokerPlayersAlliance (@ppapoker) December 8, 2015
Going back a bit further, in 2007 the number of attorneys general who supported prohibition of online gambling numbered 43.
The eight AG’s who have reportedly signed on to the most recent letter are:
- Maine AG Janet Mills
- Michigan AG Bill Schuette
- Missouri AG Chris Koster
- Nebraska AG Doug Peterson
- Nevada AG Adam Laxalt
- Oklahoma AG Scott Pruitt
- South Carolina AG Alan Wilson
- South Dakota AG Marty Jackley
Donald W. Kleine, Douglas County Attorney
Donald Kleine is the wildcard of the hearing, as there is scant information linking Kleine with gambling (online or brick and mortar) other than a few illegal gambling cases he has prosecuted.
Overall, Kleine looks like a solid witness, with an impressive resume. That being said, I’m sure Chaffetz didn’t pull his name out of a prosecutorial hat, and there is likely a very good reason he selected an unknown county attorney from Nebraska with no visible connections to online gambling to speak for prosecutors. Based on this, I expect Kleine to be in favor of a federal online gambling ban.
Based on the witness list, and the general malaise surrounding RAWA this year, I don’t expect this hearing to the move the needle in any meaningful way.
Chaffetz and fellow RAWA supporters will get their talking points in, they will be adequately refuted by other committee members with the help of Lipparelli and Campbell, and on Thursday, everyone will go back to trying to finish up their holiday shopping.
There are widespread rumors the House Oversight & Government Reform Committee will hold a hearing on December 9th to discuss the Restoration of America’s Wire Act, a bill that if enacted would prohibit online gambling in the United States.
The hearing doesn’t appear on the committee’s website, and hasn’t been confirmed by any of the key players, but according to the Poker Players Alliance’s John Pappas, the hearing is taking place:
The on again, off again iGaming hearing in Congress is now on again. OGR Comm chaired by Chaffetz expected to push RAWA on December 9th-jp
— PokerPlayersAlliance (@ppapoker) November 5, 2015
Of course, even if it is slated to happen , it could still be cancelled.
The committee is chaired by RAWA sponsor Jason Chaffetz, who has been the Congressional point man for the RAWA legislation widely believed to have been crafted solely at the behest of Sheldon Adelson. Chaffetz introduced RAWA into the House of Representatives in 2014 and 2015; Senator Lindsey Graham introduced the senate version of RAWA in those same years.
Earlier hearing goes haywire
If it occurs, this will be the second congressional hearing for RAWA this year, with the first hearing, also chaired by Chaffetz, taking place in the House Judiciary Subcommittee on Terrorism, Homeland Security and Investigations back in March.
The general feeling at the time was the witnesses at the March hearing were the proverbial stacked deck, and the hearing would be decidedly pro-RAWA, which might increase support for the measure.
However, when the hearing was over, it was a consensus loss for RAWA supporters. Chaffetz’s three hand-picked witnesses were not just against online gambling, but all manner of gambling, including the forms that helped make Sheldon Adelson one of the richest men in the world, as well as politicians favorite form, state lotteries.
By the end of the hearing, only Parry Aftab, who was in favor of legalizing online gambling on consumer protection grounds, was regularly being questioned by committee members. The other so-called experts were deemed to be wearing no clothes by most of the committee.
What to expect at the December 9 hearing
One would think Chaffetz has learned quite a bit from the March hearing’s missteps, but so far RAWA supporters have proven a stubborn bunch, willing to stick to their talking points regardless of the evidence presented or how they’re received.
If the hearing happens, one would expect a similarly stacked witness list (although better selected) as Chaffetz will have final say on any of the witnesses that are present.
That being said, the hearing could still blow up in Chaffetz’s and RAWA supporter’s faces.
The House Oversight & Government Reform Committee is a large committee with 43 members; however, there are only three RAWA sponsors and cosponsors on the committee: Chaffetz, and Representatives John Mica and Trey Gowdy. While a lack of sponsorship doesn’t necessarily mean they wouldn’t support the bill, the odds are much better than they were heading into the March hearing.
Compare the 43 member committee with just three RAWA sponsors and/or cosponsors to the 16-member Judiciary subcommittee that hosted the March hearing, where five of the 16 members were RAWA sponsors or cosponsors in 2014 and/or 2015: Gowdy, Louie Gohmert, Randy Forbes, Cedric Richmond and of course Jason Chaffetz.
Problems could also arise if small government conservatives (several are on the committee) start asking questions about the bill infringing on states’ rights and the Tenth Amendment. It should be noted that despite his claims, Chaffetz’s Tea Party bona fides are often called into question.
Furthermore, Democratic members of the committee may raise the specter of Sheldon Adelson and crony capitalism. Looking at the committee members, there are a number of strong and not easily silenced Democrat voices on the committee, such as Elijah Cummings, Carolyn Maloney, Eleanor Norton-Holmes, Stephen Lynch and Peter Welch.
Another factor to consider is what states the members represent. Eight members hail from states with legal online gaming or online lottery (which RAWA could potentially wipe out), and seven other members represent states strongly considering such expansion.
Here is the full committee membership:
- Jason Chaffetz
- John Mica (RAWA cosponsor)
- Michael Turner
- John Duncan
- Jim Jordan
- Tim Walberg
- Justin Amash
- Paul Gosar
- Scott Desjarlais
- Trey Gowdy (RAWA cosponsor)
- Blake Farenthold
- Cynthia Lummis
- Thomas Massie
- Mark Meadows
- Ron Desantis
- Mick Mulvaney
- Ken Buck
- Mark Walker
- Rod Blum
- Jody Hice
- Steve Russell
- Buddy Carter
- Glenn Grothman
- William Hurd
- Gary J. Palmer
- Elijah Cummings
- Carolyn Maloney
- Eleanor Holmes Norton
- William Lacy Clay
- Stephen Lynch
- Jim Cooper
- Gerald E. Connolly
- Matt Cartwright
- Tammy Duckworth
- Robin Kelly
- Brenda Lawrence
- Ted Lieu
- Bonnie Watson Coleman
- Stacey E. Plaskett
- Mark Desaulnier
- Brendan F. Boyle
- Peter Welch
- Michelle Lujan Grisham
AG support dwindles
Something one would definitely expect to hear extolled by Chaffetz during the hearing is the short list of state attorneys general who have signed a letter in support of RAWA, a list that includes:
- Nevada AG Adam Laxalt
- South Carolina AG Alan Wilson
- Missouri AG Chris Koster
However, Chaffetz is unlikely to put this list into its proper context.
Chaffetz will likely play up how these three important men support RAWA, but what he’ll likely leave out is the reduced support these letters have seen over the years, and the obvious juxtaposition that 47 attorneys general didn’t sign the support RAWA letter. And there’s this revelation today:
— PokerPlayersAlliance (@ppapoker) December 2, 2015
This is the third time state attorneys general have been prodded to sign a letter in support of a federal online gambling ban, and each time support has shrunk. Markedly.
In 2007, 43 attorneys general signed a letter opposing legislation that would ease restrictions on online gambling laws. A similar letter to the current one that made the rounds in 2014 reportedly maxed out at just 10 signatures.
It goes without saying that state level support for a federal prohibition of online gambling is eroding very quickly. In 2007, 86% of attorneys general supported a federal ban of online gambling. In 2015, only 6% of attorneys general publicly support a federal ban of online gambling.
Florida Senator Marco Rubio is one of two Republican presidential candidates sponsoring Sheldon Adelson’s proposed federal online gambling ban, the Restoration of America’s Wire Act, or RAWA for short. South Carolina Senator Lindsey Graham is the other.
But in a recent interview with the Las Vegas Review-Journal’s Editorial Board, Rubio indicated that he’d be open to adding yet another carveout to the bill, online poker. Rubio told the Las Vegas Review-Journal that because poker requires skill, he’d consider exempting it from the ban. “On the issue of Internet poker, the only difference between the poker games and the others is that it involves an element of skill associated with and compared with just a slot machine online,” Rubio told the LVRJ Editorial Board.
Rubio also said daily fantasy sports (another game of skill) is something that will need to be looked at down the road.
Oddly, Rubio also told the LVRJ that he was “concerned about particularly (Internet gaming’s) rapid expansion in an unregulated way.” This concern seems quite misplaced, as RAWA would prohibit states from legalizing and regulating online gaming, something that would only exacerbate Rubio’s concern and create a fertile breeding ground for unregulated operators to thrive in.
Adelson not interested in carveouts
However, despite Rubio’s comments, Adelson has stood firm on additional exemptions, and this latest declaration by Rubio doesn’t seem to be coming from Sheldon Adelson, the key figure pushing for RAWA. “There is no carve-out from the bill’s sponsors,” Las Vegas Sands Senior Vice President of Government Relations Andy Abboud told the LVRJ. “There may be some varying opinions from the co-sponsors, but there really isn’t any push for it.”
Abboud made similar statements when rumors swirled about a potential lottery carveout earlier this year, as the sponsor of RAWA’s House of Representatives version, Jason Chaffetz, clashed with state lottery officials. When the topic of a lottery carveout was broached by Gambling Compliance back in March, Abboud, speaking on behalf of Las Vegas Sands, said Adelson is “unlikely to accept exemptions.”
Does it really matter?
Rubio’s divergence from the proverbial company position is unlikely to have any impact on RAWA either way. RAWA appears to be little more than a lone man’s whim, and as Bill Pascrell III said at Global Gaming Expo 2015, lobbyists are simply cashing his checks and leading Adelson down the halls of Congress on a high-priced guided tour that will produce nothing in the way of actual results.
Additionally, if Pennsylvania is able to pass an online gambling bill this year, it could prove to be the RAWA tipping point, doubling the population of the United States that has access to legal online gaming overnight, and putting the final nail in the coffin of federal action.
An exemption too far
An online poker carveout wouldn’t be novel. RAWA already has several exemptions for:
- Horse racing
- Fantasy sports
- And certain charity games
These exemptions essentially limit RAWA’s reach to online casino, online poker, and online lottery – however, there seems to be no path forward for RAWA without a lottery exemption, so you can basically add that to the carveout category.
With or without these exemptions, RAWA seems like the longest of longshots – although, a recent development might move the needle a bit, as incoming Speaker of the House Paul Ryan has hired an Adelson lobbyist as his Chief of Staff: Dave Hoppe. That being said, it should be noted that what this means for RAWA at this point in time is sheer speculation.
RAWA’s inability to gain any momentum in Congress over the past two years has lead to several reports that a watered-down version of RAWA (a multi-year moratorium on future expansion while studies are conducted instead of a cut and dry prohibition) is being floated in its place.
With Rubio’s recent comments on online poker carveouts, RAWA and RAWA-lite falling on deaf ears, and pushback from virtually every corner of the political spectrum, there just doesn’t seem to be a path forward for RAWA.
Image Albert H. Teich / Shutterstock.com
Republican Representative Jason Chaffetz has decided to make a run at what is considered the third most powerful position in the U.S. government, Speaker of the House.
Chaffetz, best known in political circles for his firebrand personality, is also quite infamous in the poker community as the sponsor of the Sheldon Adelson-inspired Restoration of America’s Wire Act bill, which seeks to impose a federal ban on online gambling.
Chaffetz, who was first elected to Congress in 2008, is seen as a long shot to win the Speakership. Chaffetz is likely banking on support from a core group of conservatives who won’t vote for the mainstream choice, and with this base support he can whip up more supporters.
This will be a tough sell, and length of service won’t be Chaffetz’s only handicap in the battle to succeed John Boehner as the Speaker of the House.
Chaffetz’s time in Congress is pretty light on accomplishments and heavy on vitriol, controversial remarks, and gaffes. While acrimony and controversial remarks appeal to a certain base of the party, Chaffetz himself runs afoul of that base on certain issues.
Chaffetz will also have to deal with the increased spotlight that comes with applying for such a high profile position. A good example of this is Joe Biden’s favorable rating and the people pointing to it as a reason he should run for president and challenge the more polarizing Hillary Clinton.
But there is a saying in politics that goes something like this: everybody has a positive opinion of you until you run for president.
What this essentially means is that once you run for an important position, people start paying very close attention to everything and anything you’ve ever done. For example, should Biden declare, he will bombarded by his numerous gaffes, old plagiarism accusations, and his policies and track record.
For Chaffetz, a campaign to become the next Speaker of the House will bring all of his perceived warts to the surface. Some have already started to make national news thanks to Chaffetz’s many appearances on cable news and bombastic comments on everything from President Obama, to legal marijuana, online gambling, and of course, Planned Parenthood.
“Well, we’ll get to the bottom of that”
At a recent hearing Chaffetz, the Chairman of the Oversight and Government Reform Committee, decided to spring a trap on Planned Parenthood CEO Cecile Richards, displaying a slide that purported to show an accurate depiction of Planned Parenthood’s services (namely, a rise in abortions and a decline in other services) that was allegedly taken from Planned Parenthood’s annual reports.
Well, it turns out Chaffetz’s trap blueprints were borrowed from Wile E. Coyote. The slide was not only misleading, but it was also put together by an anti-abortion group, not Planned Parenthood.
Chaffetz’s attempt at creating a “gotcha” moment turned him into late night fodder, leaving him speechless with an embarrassed, deer in headlights look before he could muster a, “well, we’ll have to get to the bottom of that,” statement.
Not quite what Republicans are looking for in their next Speaker.
Sir, you have a RAWA problem
Chaffetz may prop himself up as a Tea Party conservative who can attract support from that caucus, but one of his signature bills, the Restoration of America’s Wire Act, goes against two core principles of the conservative base he panders to: cronyism and federal overreach.
It’s no secret that Sheldon Adelson is behind RAWA (allegedly), and Chaffetz often claims RAWA (a federal ban) is somehow a way to protect state’s rights, and he often twists himself into a pretzel trying to support this point of view.
Chaffetz also famously told state officials that if they didn’t like RAWA they could introduce their own bills in Congress next year.
Chaffetz also managed to miss a layup when he held a RAWA hearing earlier this year. Even though he handpicked the witnesses, the hearing was a clear win for those advocating for the legalization and regulation of online gambling.
What Chaffetz managed to do was stack the deck in his favor and deal himself the losing hand.
Even before anyone digs into his policies, Chaffetz looks like a very weak candidate for House speaker.
The Center for Freedom and Prosperity led a coalition of interest groups in sending a letter to Congress opposing the Restoration of America’s Wire Act (RAWA), legislation that would ban online gambling in the United States.
What the letter said about RAWA
Addressed to House Judiciary Committee Chairman Rep. Robert Goodlatte, the letter (full text here) urges respect for the Tenth Amendment — the part of the Constitution that puts forth that all powers not given to the federal government are reserved for state governments. Goodlatte chairs the committee where RAWA was considered in a hearing earlier this year.
From the letter:
“RAWA is an outright assault on federalism. The legislation tramples on the Tenth Amendment by banning state regulation of online gambling – further chipping away at the balance between state and federal governance. The bill would overturn state laws already on the books in three states and would prohibit states from selling lottery tickets online for their own constituents – rolling back at least another six state laws.”
The letter also comes as a renewed attempt to pass a RAWA alternative — a bill that would put a two-year moratorium on online gambling expansion — gains some traction. The letter mentioned that effort, as well:
“Make no mistake about it, a moratorium is as much an assault on the Tenth Amendment as an outright ban.”
Who signed the letter
- Andrew F. Quinlan — President, Center for Freedom and Prosperity
- Michelle Minton — Fellow, Competitive Enterprise Institute
- Thomas Schatz — President, Council for Citizens Against Government Waste
- Dan Schneider — Executive Director, The American Conservative Union
- David Williams — President, Taxpayers Protection Alliance
- Seton Motley — President, Less Government
- Andrew Moylan — Executive Director, R Street Institute
- Carrie Lukas — Managing Director, Independent Women’s Forum
- Norm Singleton — Senior Vice President, Ron Paul’s Campaign for Liberty
- Heather R. Higgins — President, Independent Women’s Voice
- Bob Bauman — Chairman, Sovereign Society Freedom Alliance
- Jeffrey Mazzella — President, Center for Individual Freedom
A few of the signers added some commentary in addition to the letter. Quinlan, of CF&P, said:
“There is a great variety of gaming rules among the states, reflecting the different preferences of their respective populations. Washington should respect their wishes and not dictate to the states how best to handle their internal affairs.”
And Williams, of the Taxpayers Protection Alliance:
“The Taxpayers Protection Alliance (TPA) continues to oppose any federal ban of online gaming under RAWA. TPA is also proud to be a part of this coalition that has fought against a federal ban of online gaming and preserving a free-market approach. The federal government should not be dictating how states decide this issue nor should they be using this as a backdoor route for Internet regulations.”
The Tenth Amendment gambit
The 10th Amendment tack has been employed already — most notably by the Poker Players Alliance — and theoretically it should be an effective tool in attempting to get Republicans to oppose the bill. Most Republicans lean toward the side of states’ rights, and not having the federal government interfere in matters that the states would like to handle on their own.
Perceived moral issues like online gambling can create a dilemma for Republicans, however.
RAWA, itself, seems to have little momentum right now, but there still could be an appetite for the moratorium — which would leave in place online gambling laws in Nevada, New Jersey and Delaware, while stopping expansion elsewhere. Beating the Tenth Amendment drum should give most Republicans who don’t have a strong moral dislike of gambling some pause in supporting that potential measure, as well.
New York Assemblyman J. Gary Pretlow has been at the forefront of online gaming expansion talks in New York State. Pretlow introduced a bill that would have legalized online poker in 2014, and while he didn’t reintroduce the measure this year, his belief in online gaming expansion seems resolute.
On Thursday, Pretlow authored an op-ed in Roll Call in which he derided federal attempts to ban online gambling, specifically citing the Restoration of America’s Wire Act (RAWA) a bill widely believed to have been crafted by billionaire casino owner Sheldon Adelson that was introduced in both the House of Representatives and the U.S. Senate by Jason Chaffetz (R-UT) and Lindsey Graham (R-SC) respectively.
Pretlow wants to leave the decision in each state’s hands, rather than have the federal government make a blanket judgment, particularly when it goes against the wishes of many states.
“New York, and every state, deserves to be able to determine what gaming exists within its borders and how it is regulated,” Pretlow stated, adding, “we always have had that right and it defies logic that Congress would step in now to undercut it.”
Tax revenue, consumer protections, and enforcement
In his op-ed, Pretlow cites three reasons states are considering online gaming legislation.
The first and most obvious reason is that online gaming offers states a way to raise additional revenue through licensing fees and taxation.
Pretlow’s second argument in favor of state-level legalization has to do with consumer protections.
Pretlow notes that geolocation technology and player verification checks have been “enormously successful.” Something statements by the New Jersey Division of Gaming Enforcement confirm.
“Were RAWA to pass,” Pretlow writes, “we’d have no such technology to help keep vulnerable consumers safe.”
Earlier news on Thursday supported Pretlow’s comments, as the operators of an illegal offshore online casino were arrested for (among many charges) allegedly using the online operation to launder illicit funds. This same group is known in the industry for not paying winners and using many underhanded tactics to fleece its customers.
Pretlow’s final reason for favoring legalization is that it would allow law enforcement to crack down on fraudulent activity of illegal operators.
This improved enforcement capabilities is on full display in New Jersey, where the New Jersey Division of Gaming Enforcement, along with the Department of Justice, has been able to threaten legal action against online operators.
This has forced all but the most resilient of these operators out of New Jersey, while at the same time these sites continue to operate in other states with little fear of prosecution.
What RAWA would do
As Pretlow went on to note, RAWA would have the opposite effect its advocates claim.
Instead of protecting minors and problem gamblers from predatory forms of gambling, a prohibition on state-regulated online gaming sites would in fact open these vulnerable groups up to predatory sites, which operate in far-flung locales across the globe with zero oversight.
“Prohibition doesn’t work, it merely exposes children and consumers to a system primed to exploit them,” Pretlow argues. “If we can find a way to promote economic growth and protect consumers, we should do it.”
Unable to sell their iGaming prohibition or craft an agreeable version of the Restoration of America’s Wire Act, anti-online gambling advocates led by Sheldon Adelson are considering a new strategy at the federal level in an attempt to bring more lawmakers on board.
According to GamblingCompliance’s Tony Batt, the new approach calls for a study and moratorium on online gaming expansion instead of an al-out prohibition of online casino and poker games.
The proposed study/moratorium would effectively put an end to any threat to legalized online gaming from the Restoration of America’s Wire Act (RAWA) bills that have been introduced in the House and Senate by Representative Jason Chaffetz (R-UT) and Senator Lindsey Graham (R-SC), respectively.
GamblingCompliance noted that it’s unclear how much more support there would be for what some are now calling RAWA-lite.
The “beached whale”
One Republican lobbyist who spoke to GamblingCompliance anonymously called RAWA “a beached whale,” and perhaps even more concerning, it’s an issue driving a wedge between Republicans.
RAWA’s “beached whale” status is nothing new to iGaming analysts, as the writing has been on the wall for the highly controversial bill since late last year. RAWA’s carveouts and lack of carveouts for powerful lobbies like state lotteries made the bill toxic.
Unsurprisingly, RAWA has failed to gain enough traction in either 2014 or 2015 for it to be considered a viable bill, with most analysts putting it in the long shot category.
In 2014, RAWA was left untouched until a last ditch effort to attach the legislation to the “must pass” CRomnibus spending bill (a la UIGEA’s attachment to the Safe Ports Act in 2006) during the lame duck session following the midterm elections. The effort failed.
New year, similar story
In 2015, Jason Chaffetz reintroduced RAWA in the House of Representatives.
The proposed online gaming ban produced one somewhat farcical hearing in the House Judiciary subcommittee, and according to a previous report by GamblingCompliance, Chaffetz’s attempts to hold a second hearing have been rebuked by Chairman Bob Goodlatte.
GC’s source also indicated Goodlatte believes RAWA cannot pass the House Judiciary Committee “without significant revisions.”
Lindsey Graham recently reintroduced RAWA in the Senate, but this time it differs from Chaffetz’s bill as the senate version contains some minor concessions for state lotteries, but not enough to win state lotteries over.
Smart move by Adelson and CSIG
With RAWA – at least in its present form – essentially DOA, the new strategy calling for a study and moratorium is a smart tactical change by Adelson and his allies, regardless of whether the measure passes or not.
On the one hand it appears defeatist, essentially signaling the realization that RAWA cannot pass, but it also presents lawmakers who have thus far avoided the prickly issue (do we hate gambling enough to step all over our small federal government beliefs?) a third option by offering what appear to be reasonable concessions.
But these concessions are fool’s gold.
The reason the concessions are dubious is because a moratorium would do precisely what RAWA would have done. As currently written, RAWA would roll back online offerings in several states, but, in order to pass, RAWA would most likely have to grant current states offering legal online lottery and online gaming an exemption.
A moratorium would essentially accomplish the same online gaming prohibition as RAWA.
Still a number of problems with RAWA-lite
RAWA-lite will also have to deal with the same backlash as RAWA.
A number of states are unlikely to remain silent should the federal government try to impose a moratorium on state-level online gaming expansion. Several states are currently exploring online lottery expansion, and a number of others are likely considering it in the near future.
Pennsylvania, California, New York, and several other states would almost certainly push back against such a preemptive strike by the federal government, preferring to keep the decision to expand into online gambling in their state capitols, not in Washington DC.
If these rumors are correct, and RAWA is about to be replaced by calls for a study/moratorium, it could also be a sign that Adelson is concerned Pennsylvania, California, or another state will pass an online gaming bill either this year or next.