Continuing an ongoing dialogue between lawmakers and the Department of Justice (DOJ) regarding online gambling’s legality, Representative Diane Titus (D-1) of Nevada defended the Silver State’s iGaming industry in an open letter.
Writing to Deputy Attorney General Rod Rosenstein, Titus argued against reversing a 2011 memorandum issued by the DOJ’s Office of Legal Counsel limiting the federal Wire Act’s iGaming ban to sports betting.
Prior to the memo’s release, the Wire Act of 1961 – which prohibited sports wagering via telephonic means – had been interpreted to form the basis of a full ban on internet gambling operations of any form, known as the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.
When the DOJ shifted their stance, individual states were effectively free to pass legislation to legalize and regulate online poker and casino games.
Nevada became the second state to successfully pass an iGaming bill in February of 2013, joining Delaware, and within two months, the Ultimate Poker platform became the first legal iGaming site to go live within the U.S. New Jersey also legalized online poker that year, along with casino games, and Pennsylvania passed a comprehensive iGaming package in late 2017.
As a result, conservative donor and billionaire casino owner Sheldon Adelson has allied with conservative lawmakers on Capitol Hill to back a series of bills purporting to “Restore America’s Wire Act” (RAWA). While those efforts have proved to be toothless thus far, Adelson continues to fund the Coalition to Stop Internet Gambling (CSIG) and the arrival of ardent anti-gambling voice Jeff Sessions as Attorney General has revived the RAWA debate.
Sessions was forced to recuse himself from iGaming-related policymaking after he stated that he was “shocked” by the 2011 memo during his Senate confirmation hearings.
Titus opened her letter to Rosenstein by reminding the DOJ’s second in command of that memo’s clearly delineated directives:
“This opinion clarified that the Wire Act only applies to sports betting and does not prohibit other forms of online gaming.”
She then pointed to Nevada’s successful track record regulating online poker for the last five years as proof that iGaming legal states are thriving under the new laws:
“Much of the legal gaming in the U.S. occurs in my congressional district. Accordingly, Nevada has set the gold standard when it comes to gaming regulation and consumer protections.
In Las Vegas we have seen that a regulated market is always better than an illegal one.
Internet gaming will not go away with a reversal of the Wire Act guidance; it will merely push more consumers into black markets. A reversal will only hurt business.”
Titus also refuted claims made by Senators Lindsey Graham (R-SC) – sponsor of the original RAWA bill in 2014 – and Dianne Feinstein (D-CA), who jointly authored their own letter to Rosenstein requesting the 2011 memo be reexamined:
“The Graham-Feinstein letter uses fear tactics and hyperbolic language to emphasize their distaste for online gaming.
While they claim online gaming ‘preys on children,” in Nevada there are effective technological safeguards in place to verify age and location. In contrast, unregulated internet gaming sites provide no assurances that minors will be prevented from gambling.”
In closing, Titus observed that regulated iGaming industries force unregulated sites out of the marketplace altogether, significantly improving consumer protections:
“There is copious evidence that businesses involved in illegal online gaming have left the regulated online gaming markets in Nevada, Delaware and New Jersey.
I encourage you to carefully study this issue and consult with industry leaders, regulators and consumers before reversing Wire Act guidance in a way that could eliminate jobs in the online gaming industry, infringe on states’ rights, and exacerbate growth of the illegal online gaming market.”
In January, a bipartisan group of Congressional delegates from New Jersey – where iGaming revenue reached $245 million last year – also responded to the Graham-Feinstein letter by writing directly to Rosenstein.