This particular debate has been going on for quite a while and apparently it’s not going away. There are hearings in the works going forward regarding plans largely supported by Congressman Jason Chaffetz (R – Utah) to pass a bill which is somewhat laughably called the Restoration of America’s Wire Act (RAWA). On the surface, the purpose of this bill is supposed to either be fighting crime or helping gamblers, depending who you ask. In reality it’s a power grab which would use the muscle of the federal government to override states’ rights when it comes to regulating online gaming. During a recent conference call, when representatives of several states complained about the intrusion, Chaffetz told them they should somehow pass their own federal bill if they don’t like it.
According to a Gambling Compliance story posted today, Rep. Jason Chaffetz (R-Utah) participated in a conference call last week with about 20 state and lottery officials to discuss his proposal to create a nationwide ban on Internet gambling. Chaffetz’s bill rewrites the 1961 Wire Act, which he claims was “reinterpreted” by Obama’s DOJ in 2011—which opened the door for states to legalize online gambling. When the participants voiced their concerns that Chaffetz’s bill would also criminalize lottery activities that were legal prior to 2011, Chaffetz responded by brazenly suggesting that when his bill passes, they can try to pass their own federal bill. “You can come back and re-start if you want,” Chaffetz concluded.
Lyndsey Graham has a matching bill in the Senate. Since we’re talking about online gaming, that’s rather humorous coming from the guy who says he’s never sent an e-mail.
This is getting a lot of push back (as it should) on the state level. On reason is that it’s going to have a direct impact on state lottery games if it’s passed.
“Hichar said Chaffetz’s bill would extend prohibitions far beyond those included in the federal Wire Act of 1961. … ‘It would eliminate, for example, self-service instant [lottery] ticket vending machines and self-service online sales,’ Hichar told GamblingCompliance. … ‘It would eliminate sales of subscriptions … not to mention video lottery [terminals].’ … The conference call did little to resolve differences between Chaffetz and state lotteries on Internet gambling, according to the state official who requested anonymity.”
I generally like Jason Chaffetz and he’s done a lot during his tenure in Congress which should be admired by conservatives. But the fact is that this is a bad idea and it’s no mystery why it’s being pushed. Sheldon Adelson is behind this and essentially wrote the bill himself. It’s an attempt to use the power of Congress to shut down competition to his casinos. I understand that Adelson gives vast amounts of money to the Republican Party, but that doesn’t entitle him to write the laws to fit his own business model. Also, the idea that this legislation is some sort of return to tradition and “restoring” an important piece of crime fighting legislation is ridiculous. One of our colleagues at Town Hall explained the real intent of the original Wire Act last year.
The Wire Act was first enacted to address growing concerns over organized crime using the nation’s “race wire” to take bets on horse races and fund illicit activities. In 1961 it passed largely at the urging of Attorney General Robert F. Kennedy, who saw organized crime as a national problem that “knows no state lines.” Kennedy believed the only way to get at “kingpins of the rackets” was federal legislation targeting the source of the Mob’s money—including from illicit gambling”—the “primary source of its growth.” Out of Kennedy’s efforts came a package of bills, including what we now know as the Wire Act.
The original Wire Act was a bit of an overreach to begin with, but in the context of the times it was understandable. The feds were looking for any means possible to shut down the mob and they wanted to go after their very lucrative illegal gambling operations. The Wire Act gave them another tool to prosecute mob leaders in federal court and hit them with bigger sentences. But even if we accept that as a needed premise, this is 2015. That legislation was passed before the word internet was invented. And what they are seeking to stop is not mobsters rigging horse races, but players who are facing off against each other in various games.
RAWA is not the “states rights position” as Chaffetz claims, but is actually quite the opposite. It removes regulatory choices from the states and accomplishes nothing beyond eliminating competition for the big casinos. This is a bad idea which should be rejected.