News

Adelson Bill to Ban Online Gaming Tramples on Lotteries and States’ Rights

March 11, 2015

For Immediate Release:
March 11, 2015

Contact:
Alison Siciliano, 202-436-5565/aharden@c4cop.com
Kristen Hawn, 202-320-3792/khawn@c4cop.com

Adelson Bill to Ban Online Gaming Tramples on Lotteries and States’ Rights

(Washington, DC) Two news stories highlight problems with Sheldon Adelson’s quest to pass federal legislation to ban online gaming.

Gambling Compliance reported that Representative Jason Chaffetz, sponsor of an online gaming ban bill in the House of Representatives, “ended his participation in a conference call with state and lottery officials last week by advising them to introduce their own bill in Congress if they do not like his proposal to ban Internet gambling.”

New Jersey, Delaware and Nevada have successful, well-regulated programs in place. The best way to deter dangerous criminal activity – including fraud, money laundering and terrorist financing – is to establish regulated online gaming programs as in these states. The Coalition for Online and Consumer Protection strongly believes that this issue is best left to the states to decide and regulate, and that individual states’ gaming laws should be left to succeed on their own. State legislators, not Congress, are best positioned to decide if and how online gaming works in their communities.

What is more disconcerting is that despite pushback from states who are running successful and safe online gaming and lottery systems, Adelson’s team admits that they are the ones calling the shots on the substance of the bill, not the Members of Congress or experts from the states. “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 [Internet] space based on their simple interpretation of the Wire Act,” Andy Abboud told Gambling Compliance.

The story shows that numerous states have an appetite for numerous changes to the bill.

You can see the full text of the two Gambling Compliance stories below.

To learn more about the Coalition for Consumer and Online Protection visit our website at www.c4cop.com.

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States Clash With Chaffetz On Wire Act Bill
11th Mar 2015 | Written by: Tony Batt

Congressman Jason Chaffetz ended his participation in a conference call with state and lottery officials last week by advising them to introduce their own bill in Congress if they do not like his proposal to ban Internet gambling.

Mark Hichar, a Boston gaming attorney who participated in the conference call, said 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.”

It was the last statement Chaffetz, the Utah Republican who last month introduced legislation proposing a federal ban on online gaming, made during the conference call, according to a state official who requested anonymity.

“He just said, ‘After my bill gets passed, then you can come back and re-start if you want.’ That’s where he left it,” the state official said.

Chaffetz did not respond to a request for comment.

The March 3 conference call occurred two days before a scheduled hearing on the Chaffetz bill by 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.
The title of Chaffetz’s bill — Restoration of America’s Wire Act, or RAWA — is “inaccurate,” according to Hichar.

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 made the argument to him that his bill would reach into Nevada as well as New Jersey and Delaware and other states by rewriting state law and prohibiting things that we’re doing right now,” the state official said.

“He disagreed, and said that his bill is the states’ rights position.”

Delaware, Nevada and New Jersey authorized Internet gambling within their borders after the Office of Legal Counsel of the U.S. Department of Justice declared in 2011 that only sports-betting games are covered by the Wire Act.

About 20 representatives of various states and state lotteries were present during the conference call, sources said.

The economic development and commerce committee of the National Governors Association (NGA) arranged the call.

The NGA may release a letter as early as this week on Chaffetz’s bill, sources said.

“The NGA has been solidly opposed to all attempts to roll back the Wire Act, even before the Justice Department’s opinion in December 2011,” the state official said.

“Obviously, [Chaffetz] knows that we’re on a different side of this issue from where he is, and I think he has some perceptions about his bill and how it relates to states’ rights that we very much disagree with.”

Meanwhile, the Internet gaming community is still waiting for Republican Senator Lindsey Graham of South Carolina to introduce his own bill to ban Internet gambling.

On Sunday, Graham appeared on NBC’s Meet the Press and said he has never sent an email.
An Internet gambling lobbyist, who requested anonymity, quipped: “This guy has never sent a frigging email, but he’s trying to tell the states how to do technology.”

Adelson Likely To Resist Internet
Gambling Carve-Outs

5TH MAR 2015 | WRITTEN BY: TONY BATT

Las Vegas Sands chairman Sheldon Adelson is unlikely to accept exemptions for state lotteries and tribes in a bill to prohibit Internet gambling, according to his top lobbyist Andy Abboud.

“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 [Internet] space based on their simple interpretation of the Wire Act,” Abboud told GamblingCompliance in a interview Wednesday.

On December 23, 2011, the U.S. Department of Justice released an opinion from its Office of Legal Counsel saying sports betting is the only form of gambling prohibited online by the 1961 Wire Act.

“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.’”

As for tribes, Abboud said “online gaming raises a lot of issues in terms of how they deal with ‘off-reservation gaming,’ and transparency, so I think that would be difficult for members of Congress to be comfortable with.”

A hearing on a bill by Republican Congressman Jason Chaffetz of Utah to ban Internet gambling, originally scheduled for Thursday, has been postponed because of a heavy snowstorm that is expected in Washington, D.C. A new hearing date has not yet been set, and with Congress out of session next week, it could be near the end of the month before the hearing occurs.

Chaffetz proposed a similar ban last year, and since re-introducing his bill on February 4, the number of co-sponsors has grown from seven to 14, including 11 Republicans and three Democrats.

Five of the 16 members of the House Judiciary Subcommittee on Crime, Terrorism, Homeland Security and Investigations, which will conduct the hearing, already have co-sponsored the Chaffetz bill. Chaffetz also is a member of the subcommittee.

The subcommittee has not yet released a witness list for the hearing, but it has been widely reported that it will include University of Illinois Professor John Kindt, Stop Predatory Gambling national director Les Bernal and former U.S. Department of Justice prosecutor Mike Fagan. All three are staunch opponents of legalized gambling.

Parry Aftab, an attorney who was a board member of the defunct FairPlay USA, which supported the legalization of Internet gambling, also is expected to testify.

“As we understand it, the panel of witnesses for the hearing is certainly a stacked deck of people who are rabid, anti-gaming opponents, and I think the delay gives us more time to urge the subcommittee to have a more fair and balanced panel,” said John Pappas, executive director of the Poker Players Alliance.

“I think we have some time to maybe change the course of this hearing,” Pappas said.

Another gambling lobbyist, who requested anonymity, said the hearing is going to be “a one-sided exercise intended solely to promote Congressman Chaffetz’s legislation. The congressman is clearly focused on politics and not public policy.”

Meanwhile, Republican Congressman Tom Cole of Oklahoma, one of only two registered Native Americans in Congress, has persuaded Chaffetz to include language in the bill that stops short of a carve-out for tribes but prevents any changes to the Indian Gaming Regulatory Act of 1988 or the Unlawful Internet Gambling Enforcement Act of 2006, according to sources.

At the behest of state lotteries, Republican Senator Mark Kirk of Illinois has offered carve-out language to Republican Senator Lindsey Graham of South Carolina, but Graham has not yet responded. Graham is expected to introduce his own bill to ban Internet gambling later this year.

Last Friday, Republican state Representative John Payne of Pennsylvania introduced a resolution in the state’s House of Representatives urging Congress to defeat the Chaffetz bill.

“We introduced it basically to preserve Pennsylvania’s right to have Internet gaming,” Payne told GamblingCompliance on Wednesday.

“One of the things we have to concern ourselves with in Pennsylvania is that New Jersey and Delaware both have Internet gaming,” said Payne, who is chairman of the Pennsylvania House Gaming Oversight Committee.

“So we have New Jersey, Delaware, Virginia, West Virginia, Ohio and New York that all have gaming,” Payne said. “There’s certainly a possibility that we may want to have Internet gaming.”