Online Gambling Progress in 2015 Depends on Individual States, Says John Pappas

Last updated on November 2nd, 2018

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Poker Players Alliance Executive Director John Pappas says a real danger exists that online gambling could be banned across the United States. In a recent interview, Pappas said proponents of gambling online need to continue winning battles at the state level, but they cannot lose focus on the dangers present in the U.S. Congress.

Pappas said the stakes are highest at the federal level, because one signature could spell the end of Internet gaming for all 50 states. While most Beltway insiders suggest a federal ban is unlikely, Pappas says it could happen in 2015, if proponents aren’t careful.

Pappas said, “This issue is not going away. At the federal level, we have to go undefeated.”

The director of the PPA added, “Opponents of Internet poker only have to win once with a federal prohibition. So we are already working on our 2015 strategy and our team will be working as soon as Congress returns in January. We also have to be proactive in the states. Our best federal defense is progress in the states. It will make it much harder to pass a national prohibition on Internet poker as more and more states embrace regulation.”

About the Poker Players Alliance

Now that the American Gaming Association is neutral on the online gaming issue, the Poker Players Alliance is the single-most important public advocacy group on behalf of online gambling. The PPA supports most forms of gambling legalization and regulation, hoping to make gambling a mainstream hobby legal in most, if not all, U.S. states.

That mission necessarily requires lobbying the U.S. Congress, because federal law trumps state laws in so many instances. The PPA has worked since 2006 to have the Unlawful Internet Gambling Enforcement Act (UIGEA) repealed. While the UIGEA does not make online casinos and poker rooms illegal, it targets money transfer services which deal in illegal online gambling. The UIGEA effectively drove most Internet casinos and poker rooms out of the US market, along with the software providers and payment services which support online gambling.

Restore America’s Wire Act

In April 2014, though, the PPA had to go on the defensive at the federal level. That’s when U.S. Senator Lindsey Graham (R-South Carolina) and U.S. Representative Jason Chaffetz (R-Utah) joined forces to introduce Restore America’s Wire Act. The RAWA bill, which has bipartisan support in both houses of Congress, would make explicit that online casinos and Internet poker sites are illegal throughout 50 states. The law would expand the 1961 Wire Act’s ban on over-the-wire sports betting to include Internet casinos and card rooms, which currently inhabit a gray area under federal law.

The 1961 Wire Act was passed to make illegal sports betting transactions that took place over phone lines another other wire services. The law was meant to target money laundering and illegal bookmaking used by the mob in its racketeering. Throughout the 1960s and ever since, the Wire Act has been used to bust mobsters and organized crime syndicates.

What Does the Wire Act Cover?

Over the decades, the Wire Act was never used to bust over-the-wire casinos or poker operators, because no method existed for those types of gambling to take place over the phone lines. Such activities only became an issue after the inception of the Internet. In the 1990s, suddenly people could gamble on casino games and Texas hold’em, using online gambling software.

Opponents of gambling seized on the Wire Act’s prohibition of sports betting to claim that casino gambling and poker also are banned–or should be banned. After the UIGEA was passed, those opponents thought they had an ironclad method for banning online gambling throughout the United States. That was effectively the case from 2006 to 2011, when the U.S. Department of Justice views online casinos and poker rooms as illegal.

New Policies at the Justice Department

In late-2011, the states of Illinois and New York sent a memo to the Justice Department, asking for a clarification of its stance. In a surprise, the Justice Department announced that only sports gambling was banned under the UIGEA (though state laws still applied). Suddenly, states which wanted to license, regulate, and tax online casinos and card rooms could do so.

In 2012 and 2013, the states of Delaware, Nevada, and New Jersey passed laws to allow online gambling. This caused Sheldon Adelson, who has made more money off of land-based gambling than anyone else in history, to claim he would spend any amount to ban online gambling at the federal level. He was concerned that gambling addicts might be targetted. After being the butt of jokes, Adelson’s lobbying led to the RAWA legislation being introduced.

John Pappas: A Warning

Now, John Pappas is correct. If the proponents of online gambling do not continue to lobby the Congress, it is possible the RAWA gets passed and all the state regulations won’t matter anymore. Luckily, liberatarian members of the Republican Party are dead-set against the RAWA, because of the vast expansion of federal power it would apply. Grover Norquist, the arch-conservative hawk on the federal taxation, is lobbying against Restore America’s Wire Act. Experts believe the bill has only a 1% to 7% chance to be turned into law, but if it ever happened, the PPA’s many efforts these past 10 years would be for naught.