New Plan For RAWA: Don’t Ban Online Gambling, Just Pause Forever

July 10, 2015
New Plan For RAWA: Don’t Ban Online Gambling, Just Pause Forever

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.

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