Republican Senator Lindsey Graham of South Carolina and Republican Congressman Jason Chaffetz of Utah have made good on his promise to introduce a bill in Congress to outlaw online gambling in the U.S. Graham is the sponsor of the bill in the Senate and Chaffetz in the House.
The bill would reinstate federal policy under the Interstate Wire Act of 1961 that prohibits “all forms of online gambling.” It is titled the Restoration of America’s Wire Act.
In 2011, the U.S. Department of Justice issued an opinion that the Wire Act pertains only to sports betting and that states were free to allow online gambling within their borders. Three states—New Jersey, Nevada and Delaware—have since legalized online gambling within their states.
Graham, however, said at a press conference to announce the bill that the issue needs to be debated in Congress and not left to a DOJ interpretation.
“Because of the Obama administration’s decision, virtually every cellphone or computer can again become a video poker machine,” he said. “It’s simply not right.”
“If you want to have online gambling, then come to the Congress,” Graham said. “Let’s have a debate.”
A debate on the bill, however, has not been scheduled and observers doubt any hearings will be scheduled.
Chaffetz also faulted the DOJ decision.
“It should not be a single person in the bowels of the Department of Justice reinterpreting the law and fundamentally changing the landscape,” Chaffetz said.
The bill would not only halt any expansion of online gambling in the U.S., it does not grandfather the three states that have already passed online gambling laws.
Graham and Chaffetz said those states would need to petition Congress for permission to continue online gambling.
The bill does leave exemptions for lotteries, horse racing and fantasy sports, however. States already selling lottery tickets online—Illinois and Minnesota—would have to halt those efforts, but “live” sales of interstate lottery tickets like Powerball and Mega Millions would be permitted.
The bill comes as billionaire Sheldon Adelson, owner of the Las Vegas Sands, has financed the Coalition to Stop Internet Gambling, which is seeking to outlaw online gambling in the U.S. through lobbying efforts, advertising and a series of op-ed pieces in major publications. The coalition authored its own version of the bill, which Graham’s and Chaffetz’s bills largely copy.
Adelson maintains that internet gambling would hurt underage and problem gamblers as well as draw customers from brick-and-mortar casinos that he maintains have better controls.
Adelson is a major supporter of Republican politicians and has been a contributor to Graham, according to the website Politico. Sources tell GGB News that Adelson has pledged additional contributions to Graham after the introduction of the bill.
That alone has a number of analysts and pundits speculating why Graham—who has never spoken out against online gambling before—would suddenly introduce a bill that would in essence reduce state’s rights—a major issue for Graham—to make their own decisions on online gambling.
Graham acknowledged Adelson’s roll in the effort to ban online gambling.
“The fact that Sheldon is on board is a good thing, but I’m doing this because this is what I feel like I should do,” Graham said.
Graham and Chaffetz also said they feel their bill props up state’s rights to ban online gambling.
The bill does have one prominent Democrat backer in Senator Dianne Feinstein of California, a state reportedly considering legalizing online gaming. Feinstein has been very active in opposing off-reservation tribal gaming, to add to her anti-gaming credentials.
“Having her a co-sponsor will help a lot,” Graham said.
Co-sponsors of the bills include Senators Mike Lee, Kelly Ayotte and Feinstein in the Senate, and Reps. Tulsi Gabbard, Jim Matheson, Lamar Smith, Emanuel Cleaver, Jim Jordan, Trent Franks, George Holding, Frank Wolf and James Lankford in the House.
The proposed bill has immediately picked up supporters and opponents and rekindled the online gambling debate in Congress.
In Nevada, which has legalized online poker, lawmakers reacted cautiously to the proposed bill.
“Get the bill out there first, take a look at it, see what it does,” Senator Dean Heller (R-Nevada), told the Las Vegas Sun.
“We’re going to take it one step at a time,” added Senate Majority Leader Harry Reid (D-Nevada).
Both Reid and Heller have supported legalizing online poker only on a federal level, as opposed to slots and table games, which are legal in Delaware and New Jersey.
“I support the effort of states to decide for themselves whether or not to legalize poker,” Reid told the paper saying it is “the best solution for Nevada.”
But Reid also said he doesn’t want to see online gaming in all its forms proliferate without some federal intervention.
But even Graham says a poker exemption is not out of the question.
“If you want to have a poker exception, offer an amendment and see if it will pass,” he told the Sun.
Republican Governors Rick Perry of Texas and Nikki Haley of South Carolina have also come out in support of the bill, which may also indicate the power of Adelson’s contributions. Both have been mentioned as possible presidential candidates in 2016. Earlier, Louisiana’s Bobby Jindal had pledged to prevent online gaming from entering his state.
Both Perry and Haley sent nearly identical letters to Congress in support of toughening the Wire Act.
“When gambling occurs in the virtual world, the ability of states to determine whether the activity should be available to its citizens and under what conditions—and to control the activity accordingly—is left subject to the vagaries of the technological marketplace. This seriously compromises the ability of states to control gambling within their borders,” Perry wrote.
The letters were sent to House and Senate leadership as well as the top Judiciary Committee lawmakers in Congress.
Opposition came from the Coalition for Consumer and Online Protection, a group formed to oppose Adelson’s efforts and backed by MGM Resorts International—which has an online gambling presence in New Jersey through the Borgata Hotel Casino & Spa—and the American Gaming Association, among others.
“It’s really simple. This ban on all internet gaming would make American families and consumers less safe online,” said Mary Bono, a Republican former House member from California who is chairwoman of the coalition. “There isn’t any question whether Americans are gaming online. They are. Congress should be focused on keeping them safe, not shutting down existing consumer protections.”
The Coalition has launched its own lobbying and public relations campaign in support of online gambling.
