The effort to ban state-based online gambling on behalf of Las Vegas Casino magnate Sheldon Adelson might be back in play next week in Congress next week, reportedly being inserted into the State Justice Commerce Appropriations bill in Congress. On behalf of Adelson, Sen. Lindsey Graham (R-SC) and Rep. Jason Chaffetz (R-UT) sponsored the Restoration of America’s Wire Act (RAWA) in March of 2014 that would overturn the laws of all 50 states and federally ban state-based online gambling.
Despite the claims of RAWA supporters, the Wire Act was never intended to regulate online gambling given that the Internet didn’t even exist in 1961. Chaffetz and others claim the 1961 Wire Act prohibited online gambling and that RAWA would simply “restore” this intent since the 2011 ruling by the Department of Justice that the Wire Act never was intended to affect state-based regulated online gambling.
Seeking the passage of RAWA in Congress, Adelson has donated tens of millions to candidates and campaign funds for the election of Republicans to Congress and the Senate. His money has bought set sponsors for RAWA on Capitol Hill. Just last year, after Adelson donated $20 million to the Senate Leadership Fund, to elect Republican candidates to U.S. Senate seats, Sen. Tom Cotton (R-AR) also submitted his own RAWA-like bill in the Senate.
Supporters of RAWA have engaged in blatant fear mongering to advance their argument in favor of federally banning online gambling. They claimed that if one state legalized online gambling it would force legalized online gambling in all states. This argument failed when IT experts proved otherwise based on the experience of New Jersey, Nevada and Delaware, the three states that have legalized regulated online state-based gambling.
Rep. Chaffetz jumped into the fear mongering himself, hosting before the House Oversight Committee he chaired a hearing titled “A Casino in Every Smartphone.” The hearing was a huge win for opponents of RAWA. Experts involved in the implementation of state-based gambling testified on how technology allow the prohibition of citizens in states that ban online gambling while allowing participation by those who live in states where it is legalized. Also at the same hearing, advocates of limited Constitutional government made strong arguments on how a federal ban on online gambling violates the rights of states to set their own regulations and laws regarding online gambling. In the end, the hear not only failed to build support for RAWA, it made clear that RAWA had little support in Congress among members of either political party.
Throughout the process of advancing RAWA in Congress, a large number of Conservative and libertarian citizens groups came out strongly against RAWA. In Fact, More than 90 percent of those who participated in the Conservative Political Action Conference (CPAC) opposed RAWA, echoing the strong grass-roots opposition to the proposed federal ban on gambling.
Much revenue will be lost if Congress were to federally ban state-based regulated online gambling. It has been quite successful, and has increased tax revenues collected, in the three states that have implemented online gambling – New Jersey, Nevada, and Delaware. A federal ban on Internet-based gambling would adversely affect states like Georgia and Illinois, that have chosen to allow the sale of state lottery tickets online.
RAWA is little more than a political payoff for billionaire Adelson and his network of casinos in Las Vegas and Atlantic City, purchased by the tens of millions he has donated to Republican candidates and campaigns. The legislation has little support among the public or on Capitol Hill, and it is likely RAWA will also fail to move in Congress during the current session.