Republican U.S. Senator Lindsey Graham and Republican U.S. Representative Jason Chaffetz introduced a bipartisan bill to end online gambling on Thursday. The bill, named Restoration of America's Wire Act, would reestablish the 2006-2011 federal interpretation of the 1961 Wire Act. Under such an interpretation, licensed online gambling in states like New Jersey, Nevada, and Delaware would become illegal.
In announcing the new legislation on his website, Senator Graham was critical of President Obama. Graham's press release stated, "This is yet another example of the Holder Justice Department and Obama Administration ignoring the law. In 1999, South Carolina outlawed video poker and removed over 33,000 video poker machines from within its borders. Now, because of the Obama Administration's decision, virtually any cell phone or computer can again become a video poker machine. It's simply not right."
Lindsey Graham, Senator from South Carolina
Lindsey Graham has been a member of Congress since 1995, when he was voted into the House of Representatives in Newt Gingrich's "Contract with America" midterm election. In 2003, Graham became South Carolina's senator, being the first person besides Strom Thurmond to fill the position since 1956.
Graham is a member of the Senate Judiciary Committee, where he wields a good degree of influence. Senators who are cosponsoring the bill include Dianne Feinstein (D-California), Kelly Ayotte (R-New Hampshire), and Mike Lee (R-Utah).
Jason Chaffetz, Congressman from UtahJason Chaffetz is a U.S. Representative from Utah, which has a strict ban on all forms of gambling. Chaffetz attended Brigham Young University in 1988 and 199 as a place kicker on the BYU football team, where he holds 3 kicking records. Though he supported the Michael Dukakis presidential campaign in 1988, he became a Republican in 1990 after a meeting with Ronald Reagan. The previous year, he had converted from Judaism to Mormonism.
Jason Chaffetz served as a campaign manager for Utah Governor Jon Huntsman in 2005, then left politics to found his own company. After a political appointment by Huntsman in 2007, he chose to run for the US Congress in 2008. He has worked on social security reform, along with the "Cut, Cap and Balance" balanced budget proposal. Chaffetz's cosponsors in the House of Representatives are Tulsi Gabbard (D-Hawaii), Trent Franks (R-Arizona), George Holding (R-North Carolina), Emanuel Cleaver (D-Missouri), Frank Wolf (R-Virginia), Lamar Smith (R-Texas), Jim Matheson (D-Utah), Jim Jordan (R-Ohio), and James Lankford (R-Oklahoma).
U.S. Justice Department 2011 Ruling
The 1961 Wire Act was passed to make interstate gambling illegal and help federal authorities track money laundering and trafficking by organized crime. The law specified "placing of bets or wagers on any sporting event or contest" as the type of gambling it was supposed to stop, though wording was vague about whether it applied to other forms of gambling. In 2006, the Unlawful Internet Gambling Enforcement Act was added to the Safe Port Act. The UIGEA expanded the definition of the Wire Act to include not just sports gambling, but also casino gambling. The new law applied the Wire Act not just to online sportsbooks, but also online casinos and Internet poker.
In 2011, the states of New York and Illinois asked the U.S. Department of Justice for its interpretation of the 1961 Wire Act. The Justice Department replied they saw the Wire Act applying only to sports betting, thus returning the official federal stance to where it was from 1961 to 2006. The Restoration of the Wire Act legislation would change that interpretation, enforcing the stricter version of the law from 2006 to 2011.
Comments from Congressional Cosponsors
After the announcement of the bill, several cosponsors released statements or gave comments to the press. Below is a sampling of what these lawmakers said on the issue.
Senator Diane Feinstein's press release on her cosponsorship said, "Many online gambling sites fail to screen for underage gamblers, do nothing to prevent money laundering and offer no recourse for fraud or other criminal acts. For most Americans, including children, gambling sites are only a few clicks away."
Congresswoman Tulsi Gabbard added, "There are many concerns that have been raised by the FBI and state attorneys general, with regard to abuse and money laundering. The Internet Gambling Control Act of 2014 will restore protections against criminal activity and misuse of online gaming platforms to pre-2011 interpretation of the law. This affects states like Hawaii directly that prohibit any kind of gambling."
Senator Kelly Ayotte of New Hampshire had this to say on the Restoration of America's Wire Act legislation: "The Internet has become the 'Wild West' of gambling, which presents a significant problem for law enforcement when it comes to shutting down illegal activity related to online gaming. This legislation restores the Wire Act so that there is authority to address crime that occurs with regard to Internet gambling, and the bill includes a provision to preserve the ability of traditional retail lottery sales by brick and mortar stores."
Small Chance of Passage
The general consensus is the Restoration of the Wire Act bill has little chance of passing. It's not easy to pass any legislation in the dysfunctional, gridlocked Congress of 2014. Given this is a midterm election year, the chances politicians are going to take many risks are less. The bill is said to have the full support of Sheldon Adelson, who will provide money to see the public learns his opinions on the legislation.
At the same time, the new bill has opposition on both sides of the aisle. While the bill will have bipartisan support, it will have bipartisan opposition. Republican and Democrat politicians in Nevada, New Jersey, and Delaware have staked reputations and state budgets on licensed online gambling. In Congress, Democrats seem willing to take a more small government approach to online gambling, while only a certain segment of Republicans are willing to take a big government approach, usually for moral reasons. A large section of the GOP views online gambling from a more libertarian perspective: a matter of private choice or view it as a matter of business versus government. Already, it's been said that lotteries, horse racing, and fantasy sports will continue to receive exemptions.
Proponents of the bill will portray online gambling as particularly dangerous for problem gamblers. Advocates of "Restoration of the Wire Act" will charge that online gaming provides criminals a chance to launder money. Some will even charge that the technology can be fooled and children can play for real money. An attempt might be made to combine the bill with the one introduced by Democrat Harry Reid and Republican Dean Heller of Nevada, which also seeks a federal ban. Unless some event happens to crystalize American public opinion against online gambling or the sponsors are able (like the UIGEA) to tack the bill onto an existing, more popular piece of legislation, it's unlikely that the bill will have the kind of support needed to pass.
