Are Any State Lawmakers Happy With RAWA?

March 18, 2015
Are Any State Lawmakers Happy With RAWA?

On March 26th, the House Subcommittee on Crime, Terrorism, Homeland Security, and Investigations will host a hearing to Discuss the Restoration of America’s Wire Act (RAWA) bill introduced by Rep. Jason Chaffetz.

The bill is widely believed to have been introduced at the urging of casino mogul Sheldon Adelson, who is also seen as directing the anti-online gambling efforts.

If RAWA were to pass, it would prohibit online gambling across the U.S., including in states that have already legalized online gambling (Nevada, New Jersey, Delaware) and states considering legalization.

This has led to several state lawmakers and officials not only opposing the bill, but also creating contingency plans to hopefully weaken RAWA should it pass through exemptions and/or grandfather clauses.

Kentucky Lottery Just Says “NO” to RAWA

In a letter sent to Senate Majority Leader Mitch McConnell, Arthur L. Gleason Jr., the President and CEO of the Kentucky Lottery, voiced his opposition to RAWA, and also suggested Congress should exempt online lottery from RAWA if they are hell-bent on passing the bill in some form.

Gleason has a good reason for speaking out, as Kentucky is in the process of launching an online lottery, which would make them the fifth state with such offerings – Illinois, Michigan, Minnesota, and Georgia being the others.

RAWA would derail Kentucky’s efforts up to this point, and would likely cost the state millions of dollars in revenue and investment.

Georgia’s lottery director, Debbie Dlugolenski Alford penned a similar letter to a U.S. House Attorney last year, in which she stated RAWA would cost Georgia some $39 million if it were to ban the state’s online lottery sales.

RAWA sponsor, Rep. Chaffetz recently had a testy conference call with state lottery officials as well.

Pennsylvania is looking for an exemption

In Pennsylvania it’s not the lottery that is fighting mad, but State Representative John Payne who is pushing back against RAWA.

Payne, who is fast becoming his state’s Raymond Lesniak (despite being on opposing sides of the political spectrum, the two are championing a myriad of gaming issues in their respective states), spearheading gaming expansion efforts since taking over the House Gaming Oversight Committee Chairmanship this year.

Payne has already introduced an online gambling bill and scheduled several hearings in the Gaming Oversight Committee on gaming expansion in Pennsylvania.

On March 3rd, Payne introduced a resolution (HR 140) urging Congress to defeat any bill that would ban online gambling at the federal level. And as he stated, he expects HR 140 to be the state’s first order of business on this front.

What HR 140 says

HR 140 was sponsored by Rep. Payne, and doesn’t beat around the bush as to its purpose:

A Resolution urging the Congress of the United States to defeat H.R. 707 and any other legislation which would prohibit states from authorizing and conducting Internet gaming.

HR 140 goes on to say RAWA would preclude Pennsylvania from creating a legitimate online gaming business, force the shutdown of black market online gaming operators, and, “directly and negatively impact Pennsylvania by foreclosing the future potential of Internet gaming to generate tax revenue, to create economic and employment opportunities, including high-tech software jobs, and to foster valuable business ventures for Pennsylvania casinos.”

In addition to Payne, the resolution has picked up ten cosponsors.

On March 5th, the pro-regulation online gaming lobby group, the Coalition for Consumer and Online Protection (C4COP) lauded Payne’s resolution, with spokesperson Alison Siciliano saying:

“We applaud the numerous cosponsors and supporters of this resolution for standing up for the economic interests of their state and for their efforts to ensure Pennsylvania has a safe and well‐regulated gaming industry.

We thank these legislators for asking that states maintain the responsibilities that they have exercised so capably for generations.”

Similar to a 2014 resolution

A similar measure was introduced in November of 2014 in Pennsylvania (HR 1095) by Representative Mike Sturla. The introduction of Sturla’s resolution occurred right around the time RAWA first started gaining momentum in the lead-up to the lame duck session in Congress.

The November resolution reads near-identical to Rep. Payne’s resolution:

A Resolution urging the Congress of the United States to defeat S. 2159 and H.R. 4301, which prohibit states from authorizing and conducting Internet gaming.

Representative Sturla hasn’t cosponsored Representative Payne’s HR 140 at this time.

Can New Jersey be grandfathered in?

In October of 2014, the New Jersey Tourism, Gaming and the Arts Assembly Committee passed a similar resolution calling on Congress to oppose the two RAWA bills, SB 2159 HR 4301.

The resolution reads in part:

“A federal prohibition against Internet gaming would therefore directly and negatively impact New Jersey by dismantling the investments that the State and the casinos have already made, taking away the economic and employment opportunities already realized by the State and its residents, and foreclosing the future potential of Internet gaming to generate tens of millions of dollars in tax revenue, create high-tech software jobs, and foster valuable business ventures for Atlantic City casinos.”

Democratic Governors Association releases letter against RAWA

On Wednesday, the Democratic Governors Association released a letter acknowledging the group’s disapproval of RAWA, stating that they “believe strongly that the issue of Internet gaming, as has historically been the case with other forms of gaming, is best left to the states to decide and regulate.”

“State legislators, working in tandem with governors and executive branch agencies, are best positioned to decide if and how online gaming works in their communities. Furthermore, a well-regulated online gaming industry could provide a significant revenue source for state governments while allowing our law enforcement agencies to better deter and prosecute dangerous criminal activity – including fraud, money laundering and terrorist financing,” wrote the DGA.

What impact will these letters and resolutions have?

In real terms the resolutions and letters will have zero impact on RAWA legislation.

What it will do is send a clear message to Pennsylvania’s Congressional delegation that RAWA isn’t some inconsequential bill that will have no repercussions for their constituency.

These resolutions from the state legislature and letters from lottery directors send a clear message to Congress that a vote for RAWA will not be seen favorably by their peers in state legislatures – who some members of the U.S. House of Representatives  and U.S. Senate may be looking to for political endorsements, or for help on the campaign trail down the road.

Imagine the campaign ad in which a New Jersey, Kentucky, or Pennsylvania politician finds their vote for RAWA as the centerpiece, linking him or her to Sheldon Adelson and crony capitalism, as well as costing their state millions of dollars in revenue.

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