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Fight over online gaming about to heat up again in Congress

20 Mar 2014

By Steve Tetreault
WASHINGTON, D.C. -- The fight over online gaming is about to heat up again in Congress.

U.S. Rep. Jason Chaffetz, R-Utah, is preparing to introduce a bill that would restore a pre-2011 federal ban on gambling over the Internet, a spokeswoman confirmed Wednesday. It would join a similar bill to be sponsored in the Senate by GOP Sen. Lindsey Graham of South Carolina.

The bills might be introduced when Congress returns to session next week, aides said.

A draft that has been circulating on Capitol Hill declares the legislation would “restore longstanding United States policy that the Wire Act prohibits all forms of Internet gambling.” Its goals are consistent with the highly publicized campaign by billionaire casino owner Sheldon Adelson to outlaw Web gaming.

In recent years, Congress has been unable to sustain momentum for any piece of gambling legislation, pro or con.

But lobbyists say a wild card this time is Adelson, the megadonor to Republicans and their causes who believes online gambling is unsafe and bad for society and who has vowed to spend “whatever it takes” to stop its spread.

“All bets are off. It’s not like the guy has never shot for the sun, moon and stars,” said a gaming lobbyist who asked not to be identified to discuss activity behind the scenes as industry and anti-online gaming interests arm to resume battle.

The bill draft appears to exempt pari-mutuel betting on horse races. But it might pose a problem for lotteries, according to people who have examined it.

The 1961 Interstate Wire Act prohibited the operation of most betting businesses. But the law was reinterpreted by the Department of Justice in December 2011 to outlaw only sports gambling, an opinion that opened the way for states to legalize online poker and other casino games. Nevada, Delaware and New Jersey have authorized forms of online gambling, and the practice is being considered in a dozen other states.

Congress as well has debated how or whether to install federal regulation of online gaming, but has failed to reach any consensus. Major casino companies such as Caesars Entertainment and MGM Resorts International want to legalize it and prefer a nationwide marketplace, viewing online gaming as a strategy to expand their brands, attract younger players and create new streams of revenue.

Adelson has launched an advocacy group, the Coalition to Stop Internet Gambling, whose spokespersons include former Democratic Sen. Blanche Lincoln of Arkansas and former New York Republican Gov. George Pataki.

In response to the emerging Graham and Chaffetz bills, the group on Wednesday said, “We support and applaud all efforts to restore the long-standing interpretation that the Wire Act prohibits Internet gambling. It’s common sense that putting a virtual casino in the pocket of every American with a smartphone is bad public policy.”

MGM Resorts and the American Gaming Association have launched a competing group, the Coalition for Consumer and Online Protection, with former Republican Reps. Mary Bono, R-Calif., and Michael Oxley, R-Ohio, as spokespersons. It advocates legalized online gaming, regulated to protect gamblers.

“Banning all online gaming nationwide, as this bill effectively does, would put American consumers at serious risk,” Bono said in a statement Wednesday. “It is impossible to stand in the way of the Internet; instead, we should embrace and shape these new technologies in a way that is safe for consumers.”

Chaffetz, who comes from one of only two states with no forms of legalized gambling, was not available to talk about the bill on Wednesday, his office said. Hawaii is the other state with no legal gambling.

Graham previously confirmed he was working on a bill to restore the Wire Act and effectively restore the prohibition on online gambling.

“I don’t think it’s good for the country,” Graham told the trade publication Gambling Compliance. “The Wire Act has been the law of the land for decades.”

Sens. Harry Reid, D-Nev., and Dean Heller, R-Nev., continue to discuss a possible bill to restore Wire Act prohibitions against most forms of online gambling but legalize online poker consistent with the law in Nevada.

Heller said in an interview last week he wants to see what Graham does with his bill, “and we’ll go from there.”
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