WEEKLY FEATURE: Online Gaming Ban Back in U.S. Senate

Senator Lindsey Graham (R-South Carolina), shown at left with LVS Chairman Sheldon Adelson, has introduced his expected bill to ban online gaming in the U.S. in the Senate. The bill, titled the Restoration of America’s Wire Act, is seen as coming from the Adelson-backed Coalition to Stop Internet Gaming. A companion bill was introduced in the House of Representatives in February. Meanwhile, Texas Congressman Joe Barton has introduced a bill to legalize online poker.

The other shoe has dropped in the move to ban online gambling in the U.S. as Senator Lindsay Graham—now a Republican candidate for president—has introduced his version of the Restoration of America’s Wire Act bill into the U.S. Senate.

The bill seeks to rewrite the 1961 Federal Wire Act to include a prohibition against online gaming. Graham and supporters dispute a 2011 opinion by the Department of Justice that said the original wire act applied only to sports betting and does not ban intra-state online gaming.

Three states—Nevada, New Jersey and Delaware—have legalized online gaming within their borders since the DOJ ruling.

The bill is identical to a bill from Graham introduced in the Senate in 2014 and does not include a grandfather clause for states that already have online gaming. A companion bill from U.S. Rep Jason Chaffetz, R-Utah, was introduced in the House of Representatives in February.

The bill is seen as coming from Las Vegas Sand owner Sheldon Adelson’s Coalition to Stop Internet Gambling. Adelson has backed an extensive lobbying effort to ban online gaming, saying it will lead to underage gambling and more gambling addictions among the public. He also feels online gambling will hurt the brick-and-mortar casino industry.

However, the bills have had some backlash from conservatives charging that they subvert state’s rights to make their own decisions on online gambling. The bills have also been criticized for being simple “cronyism” to appease a major donor to Republican candidates in Adelson.

John Ashbrook, a spokesman for the coalition told the Las Vegas Review Journal that the group feels momentum to pass the ban is building “and the Graham-Feinstein bill is an important part of the effort.”

Senator Dianne Feinstein of California is the lead Democratic co-sponsor. Other co-sponsors—all Republicans—include senator and presidential candidate Marco Rubio, and Senators Mike Lee, Kelly Ayotte, Dan Coats, and Thom Tillis.

“Predatory online gambling is ruining lives all across our country and this bill will help us stop it,” Ashbrook told the paper.

But as if it was timed to coincide with Graham’s bill—which has been expected for several months—a Texas Congressman also introduced a bill in the house to legalize online poker last week.

The bill from Congressman Joe Barton, R-Texas, has also been previously announced and “licenses and regulates internet poker and seeks to restore the rights of people to play the “all-American” game, while at the same time protecting them from fraud.”

“My bill is needed now more than ever,” Barton said in a press release. “It creates one federal standard that protects the integrity of the game and the financial interests of players—while protecting American consumers from nefarious and predatory overseas gambling operations.

“Players deserve to have a legal, on-shore system that makes sure everyone is playing in an honest, fair structure,” Barton said. “The complex web of state and local regulations now being devised could leave players at risk. I believe H.R. 2888, the Internet Poker Freedom Act of 2015, creates a federal standard and provides players proper protections. At the same time, it includes safeguards for children and problem gamblers.”

The bill was quickly endorsed by the advocacy group the Poker Player’s Alliance.

“Congressman Barton’s bill is common sense public policy that would allow qualifying states to pool players together to create a more robust market that will drive consumer satisfaction as well as increase state revenues,” said John Pappas, executive director of the PPA. “A clear regulatory environment is in the best interest of all consumers, operators, regulators, and law enforcement.”

While it’s hard to say whether Barton’s bill will gain traction in the House, it does point out the division and debate on online gambling now underway.

Graham’s bill, while hardly a surprise, was immediately denounced by advocates for regulated online gaming.

“It is unfortunate that Sen. Graham and Sen. Rubio and several colleagues have chosen to carry Adelson’s water in the U.S. Senate,” said Kristen Hawn, a spokeswoman for the Coalition for Consumer and Online Protection, a pro-Web gaming group funded by MGM Resorts International and Caesars Entertainment Corp.

“By introducing this ill-conceived piece of legislation in spite of broad bipartisan opposition, they have chosen political interests over the interests of sound policy,” Hawn said in a press statement. “Law enforcement officials and Internet safety advocates alike have said that it does nothing to protect children and consumers from online predators, and nothing to prevent illegal activity such as money laundering and identity theft.

There have also been concerns about the bill from state lotteries, many of which have moved to online ticket selling. In fact, the Review Journal cited unnamed sources as saying Graham’s bill was delayed while he was in negotiations with lottery representatives, though no language to protect lotteries was inserted.