Rep. Chaffetz is an Offshore Site’s Best Friend

John Mehaffey February 10, 2015

Rep. Jason Chaffetz (R-Utah) reintroduced the Restoration of America’s Wire Act (RAWA) earlier this week, a bill written by attorneys representing Las Vegas Sands.  He makes many outlandish claims about his motives.  These include his opinion that regulated online poker sites in Delaware, Nevada, and New Jersey market to minors.  Lobbyists on his side have asserted that online gaming funds terrorist organizations and money launderers.

Chaffetz does not provide any proof for his argument.  He can’t.  There is no evidence that any underage players has ever gained access to any regulated U.S. site.

The assertion that these sites fund terrorist groups is beyond absurd.  Delaware’s online gaming industry is operated under the state lottery.  Maybe Chaffetz does not understand how state lotteries work since his state does not have one.  He also has been unable to produce evidence that regulators in Nevada or New Jersey or the sites operating are involved in any illicit activities or allow minors.  Once again, he can’t, because nothing of the sort is happening.

Banning Regulated Sites Accomplishes Opposite Goal Chaffetz Claims to Want

Regulated gaming sites are required to identify customers that attempt to play for real money.  This includes a full verification of age and location.  The goal of Chaffetz is to take these companies out of the market.  That would only leave unlicensed companies in the market that are not held to the same standards.

The proponents of RAWA will claim that the ultimate goal is to remove all online gaming sites from the U.S. market, even ones operating illegally.  That sounds great in theory, but those unlicensed sites are already illegal.  Criminal cases brought against them have done nothing to prevent their operations in the U.S. market.

The U.S. Attorney’s Office in Maryland has brought cases against two major offshore online poker and sports book operators.  Unlike Black Friday, the sites involved in the Maryland cases stayed in the market and never missed a beat.

One poker network that has been indicted has grown to become the fourth largest in the world, according to PokerScout.  Its founder remains on the ICE 10 Most Wanted list.  That case is unresolved three years later.

Both networks are the two fastest when it comes to paying U.S. players.  This is proof that, at least up to this point, enforcement efforts against offshore sites are futile, assuming there is a will to stay in the U.S. market.

These sites do not check databases to make sure that a player is of age before depositing.  Many transactions are made through cash transfers.  If by chance an underage player is discovered by these sites, it is only at the cashout point during a document check.  The site will simply keep the player’s funds under this scenario.  Regulated sites would catch the minor before he or she was ever able to enter the system.  Chaffetz cannot refute this.  Any attempt to claim otherwise is disingenuous at best.

Offshore Sites Respect Regulated States

Most offshore sites have abandoned Delaware, Nevada, and New Jersey.  Many companies that still accept U.S. bets only do so in the 47 states that have yet to regulated online poker and casino games.  This is proof that regulation works as a disincentive to competing against licensed sites.  If Chaffetz gets his way, there is little doubt that these unlicensed sites would reenter the former regulated states.

For whatever reason, opponents of regulated online gaming would rather have those funds go to offshore sites, as opposed to those licensed in the U.S. where taxes are paid and jobs are created.  This is a position created out of complete ignorance of how the industry operates or perhaps with the complete malicious intent of destroying jobs and existing tax revenue.

People’s livelihoods depend on this industry.  Utah has already banned online gaming at the state level.  It is well within its right to do so.  Trying to force that opinion onto other states because a big political donor demands it is a repulsive abuse of power.

Should Sheldon Adelson get their way and put regulated sites in Delaware, Nevada, and New Jersey out of business, all that does is take away profits from his competitors and into the hands of unlicensed sites.  If that occurs, it will be the best thing to happen to the online gaming black market.  Those groups will not have to fear the competition that a regulated U.S. market creates.  They can keep all of the rake, vig, and casino wins to themselves.  They will not even have to pay taxes on that revenue, thanks to Adelson and the politicians that promote his agenda.

 

 

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