Adelson’s Failed Online Gambling Ban Gets Another Hearing in Congress This Week?

After many defeats over the last two years, Congress might yet again take up Sheldon Adelson’s legislation to federally ban online state-based gambling, if members insert the RAWA into the State Justice Commerce Appropriations bill in Congress next week. The legislation, called the Restoration of America’s Wire Act (RAWA), was originally introduced in Congress in March of 2014 by Sen. Lindsey Graham (R-SC) and Rep. Jason Chaffetz (R-UT).

As Chairman of the House Appropriations Committee, Rep. Rodney Frelinghuysen (R-NJ) will be expected to represent the interests of his own state, which has found success in legalizing state-based online gambling, by strongly opposing the RAWA amendment expected to be submitted by Rep. Charlie Dent (R-PA). Should Rep. Frelinghuysen prove to be more loyal to Adelson than his constituents at home, voters in his district might well render their judgment on Election Day next year.

RAWA, by the claims of it’s sponsors, would “restore” what they claim is the original intent of the 1961 Wire Act to federally ban internet gambling. However, the Wire Act was never intended to regulate online gambling, given that the Internet did not exist at the time. Enacting RAWA would extend the Wire Act to federally ban online gambling, something never intended by Congress in 1961 when the Wire Act was passed to prohibit sports betting over phone lines.

While Adelson has obtained the support of Senators like Graham, Marco Rubio (R-FL) and Tom Cotton (R-AR) for RAWA, he has donated tens of millions to help elect Republicans to the Senate. 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 to advance Adelson’s cause.

Fear mongering has been a hallmark of the argument in favor of RAWA. Supporters claim 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.

Seeking to build support for RAWA, Rep. Chaffetz held a hearing before the House Oversight Committee he chairs, titled “A Casino in Every Smartphone.” Opponents of RAWA dominated the hearing, and by its end there was very little support in Congress for enacting 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. Additionally, 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.

RAWA has attracted strong grass-roots opposition from many conservative and libertarian groups. Additionally, 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.

Online gambling has been successful, and has generated substantial tax revenues for the three states that have implemented and legalized regulated 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 has little support among the public, or influential grass-roots groups, or among members of Congress. Given it is nothing more than a crony capitalist favor for billionaire Adelson and his network of casinos in Las Vegas and Atlantic City, it has become quite politically toxic for politicians to support enacting RAWA. The proposed legislation has failed several times in Congress, and that is likely to happen again in the current session of Congress.