Less than one month after Pennsylvania moved to legalize and regulate online gambling, a pair of power players in the U.S. Senate are once again seeking a federal ban on the iGaming industry.
In a letter sent on November 21, Senators Lindsey Graham (R-SC) and Dianne Feinstein (D-CA) enlisted the support of Rod Rosenstein, who serves as deputy Attorney General at the Department of Justice (DOJ). Graham and Feinstein asked Rosenstein – who was appointed by President Donald Trump in January of this year – to reexamine a 2011 opinion issued by the DOJ’s Office of Legal Counsel.
In that 2011 opinion, the DOJ ruled that the Wire Act of 1961 was applicable only to sports betting, and not other forms of gambling. The Wire Act, which bans bettors and bookmakers from conducting wagers over the telephone, was previously used by the federal government as the basis for the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.
By revising its stance on the Wire Act’s purview, the DOJ effectively returned the issue of online gambling on poker, casino games, and daily fantasy sports (DFS) to the states. Since 2011, four states have successfully passed legislation to regulate the iGaming industry – Nevada, New Jersey, Delaware, and Pennsylvania.
Graham introduced the Restore America’s Wire Act (RAWA) in 2014, with backing by anti-iGaming conservative donor and billionaire casino mogul Sheldon Adelson and his Coalition to Stop Internet Gambling (CSIG). Feinstein has been a vocal supporter of RAWA, despite the bill’s repeated failure to gain traction within Congress.
In their letter to Rosenstein, the pair pointed to Pennsylvania’s recent passage of a comprehensive iGaming package as a sign of things to come should the 2011 opinion remain intact:
“Pennsylvania has recently enacted legislation authorizing internet gambling, and other states are lined up to follow suit.
Online casinos are already operating across state lines pursuant to compacts, and states are contemplating opening up their online casinos to foreign markets.
We fear that unless the DOJ promptly revisits its 2011 opinion, our prediction that online casinos could spread across the country could come to pass.”
The senators also trotted out several disproven claims about the iGaming industry’s connection to underage gambling and other forms of crime:
“Internet gambling takes gambling too far. It preys on children and society’s most vulnerable.
The FBI concluded that ‘[o]nline casinos are vulnerable to a wide array of criminal schemes,’ including money laundering and ventures by transnational organized crime groups.
Of particular concern to us, as senior members of the Senate Judiciary Committee, is whether the FBI has the resources to effectively oversee a robust internet gambling industry to assure online casinos are not being used for criminal activities, and to protect the interests of states that prohibit internet gambling.”
States like Nevada and New Jersey have successfully operated online gambling platforms since 2013, with no documented instances of children gaining access.
John Pappas, executive director of the Poker Players Alliance (PPA), issued a statement rejecting the claims made by Graham and Feinstein:
“If they were handing out awards for Congressional letters, this one would win ‘most misleading’ in a landslide. Aside from the statement that Pennsylvania authorized online gaming and other states are considering it, there is nary a fact contained with the letter’s five paragraphs.
Congress has given express authority to states to regulate iGaming, a detail that Senators Graham and Feinstein repeatedly ignore.
Moreover, they continue to misrepresent an almost decade old FBI letter that does not address the realities of regulated online gaming.”
Rosenstein made headlines again this week, when House Intelligence Committee Chairman Devin Nunes announced that the deputy AG could be facing contempt of Congress charges in a political row connected to the Special Counsel investigation of President Trump.