In a sign of what debate on the Sheldon Adelson backed bill to ban online gambling may become, U.S. Rep. Jason Chaffetz abruptly left a conference call with officials from state’s that have online gambling and online lotteries.
His message—If you don’t like the bill introduce your own.
Aside from the fact that he was talking to state representatives—not federal officials in Congress—reports say many officials were stunned by Chaffetz comment.
Mark Hichar, a Boston gaming attorney who participated in the conference call, told gamblingcompliance.com that he was taken aback by Chaffetz’s suggestion that states should introduce their own internet gambling bill in Congress.
“It seemed very odd that you would expect a state to file federal legislation to enable it to be able to conduct gaming in its borders,” Hichar said. “I found that statement to be surprisingly aggressive.”
Others characterized the comment as saying that after the bill gets passed, the states could come to Congress and try to rework it.
The conference call occurred March 3, just days before the bill—called the restoration of America’s Wire Act—was scheduled for a hearing before the House Judiciary Subcommittee on Crime, Terrorism, Homeland Security, and Investigations. The hearing was postponed because of a snowstorm and has not yet been rescheduled.
Three states—New Jersey, Nevada and Delaware—have already approved online gambling within their state borders and several other states have online lottery services. The bill would essentially retroactively outlaw these forms of online gaming.
The economic development and commerce committee of the National Governors Association arranged the call. About 20 state representatives participated in the call.
In another report, a top lobbyist for Adelson said it was unlikely supporters of the bill would approve of “carve outs” for the state lotteries or Native American tribes.
“Very specifically, I don’t think that there’s any appetite to have any carve-outs for anyone that assumed a risk, meaning anyone who chose to go into this space based on their simple interpretation of the Wire Act,” Andy Abboud told GamblingCompliance.
Adelson has been financially backing the bill, which would change the 1961 Wire Act. In 2011, the U.S. Department of Justice released an interpretation of the bill saying it only applied to sports betting and did not prohibit states from offering inter-state online gambling.
Delaware, New Jersey and Nevada has since launched online gambling in their states.
“Certainly, any viable company—whether it be a lottery or anyone else—knew that that was a risky enterprise,” Abboud said. “If they had good attorneys, they had legal memos that said, ‘If you proceed with online activities, you do so at great risk.’”
Meanwhile, many proponents of online gambling feel that the upcoming hearing on the bill before the subcommittee will have a stacked witness list of those in favor of the ban.
Five of the 16 members of the subcommittee are co-sponsoring the Chaffetz bill. Chaffetz also is a member of the subcommittee.
An expected companion bill in the U.S. Senate, sponsored by Sen. Lindsey Graham, R-S.C., has not been introduced yet.
