This Wednesday a congressional hearing on the topic of state-wide online gaming was held. The hearing was titled “A Casino In Every Smart Phone -Law Enforcement Implications.” It was the second hearing on the topic brought up by Las Vegas Sands owner Sheldon Adelson and his Coalition to Stop Internet Gambling.
Committee Chairman Jason Chaffetz argued three main points during the hearing.
He opened with a claim that an “unnamed bureaucrat down in the bowels of the department of justice” has altered the 50-year-old wire act with a single memo in 2011 reinterpreting the law as only applying to sports betting. He believes that this is not how changing a law should be handled.
“The result is now anything connected to the Internet — desktops, laptops, tablets, smartphones — no matter your age, potentially becoming a casino,” Chaffetz said. “I’ve got a problem with that. I think the country’s got a problem with that, and it certainly needs vetting and discussion. And, again, if you want to make a change, come to Congress, introduce a bill, and make a change. But don’t just change the law based on an OLC opinion.”
His second point was that because the internet has no walls around it, it cannot be properly monitored.
“For anybody to argue that the Internet can be walled off and used just in these certain boundaries, it’s a joke,” Chaffetz continued. “Come on. Nobody with a straight face is going to come before the American people and say ‘well, the Internet, it’s just for the people of Nevada, or it’s just for the people of Rhode Island.’ Are you kidding me? You give me a good 18-year-old and about 36 hours, and you can hack through just about anything.”
Finally, he stated that since this bill would block the rights of states to determine their own course of action in regards to gambling that this would actually be a state’s rights bill protecting each of the states. He then passed around a letter from last year signed by 16 state Attorney Generals supporting RAWA (a letter of which the newer version has only garnered eight signatures).
Though Chaffetz’ case seemed simple enough, many of his claims were illogical, and the other committee members quickly began to point them out.
Rep. Stacey Plaskett informed Chaffetz that the wire act had not been overturned by one man. In fact, it had been an informed opinion made over the course of a decade of debate in Congress, including exemptions made for state offered online gaming.
Ted Lieu showed a GeoComply video showing how geolocation is used within the borders of New Jersey to capture a player’s exact location down to the meter.
“Thank you Mr. Wilson and Mr. Kleine for your public service,” Lieu said. “Thank you for your testimony today, and I have no doubt that you believe in your testimony. But I do have to point out that parts of your testimony were simply wrong when it comes to technology. Mr. Kleine, you had testified such as that any smartphone can be used for online gambling, and it’s virtually impossible to pinpoint a location and, Mr. Wilson, you said that any smartphone can be used as a virtual casino. The notion that you can’t pinpoint location is simply incorrect. Just look at your GPS next time on your smartphone, it will tell you where you are relatively accurately.”
This was in reference to two of the three witnesses that were brought forth in the hearing. Donald Kleine, a Nebraska Douglas County Attorney, gave a testimony on the challenges of local law enforcement to protect its citizens from online gambling sites. However, he mentioned nothing about the state regulations that would actually help with the law enforcement.
John Pappas, Poker Players Alliance executive director, said that “Certainly two of the witnesses — Kleine and Wilson — had no clue what they were talking about. At the end of the hearing, they conceded that intrastate online gambling is not a problem. They had no business being there. Clearly, they were paid hacks of Sheldon Adelson, and that’s how they were there. Their lack of preparation and knowledge was really evident.”
He went on to say that “It’s very unusual to see the chairman of a committee lose such control over an issue that he cares about. For us, that was very gratifying to see. We went into his home turf, and we beat him every which way. I think our team and our side’s preparation and knowledge helped educate a lot of members to ask tough questions, and it led to a hearing I don’t think Mr. Chaffetz expected.”
It seems like the three witnesses that were brought forth by Chaffetz in opposition to the RAWA act were hugely uninformed. Representing the FBI was Joseph Campbell, an assistant director for the criminal investigations division. He spoke of how there were major concerns about unregulated online gambling across borders. However when asked of instances that online gambling had been used for illegal activities in a regulated US market he was unable to respond with any specifics.
Representative Dena Titus from Nevada had a word to say about this as well. “As I’ve heard the testimony, I’ve been pretty astounded that Mr. Campbell could come representing the FBI to talk about the problems of regulated Internet gaming and not be able to cite a single case in which it’s been the problem, or give us any statistics that indicate it is a problem. And Attorney General [Wilson], how you can use a 10th Amendment argument to say that federal regulation gives you more states’ rights is kind of jabberwocky to me. And I wonder if you’re so concerned about someone in South Carolina gambling on a site that’s located and regulated by and limited to Nevada, what you’re doing to protect those teenagers with a cell phone in South Carolina from gambling illegally overseas.”
One of the most logical arguments that was heard throughout the hearing was from Nevada state Senator Mark Lipparelli. As former chairman of the state’s Nevada Gaming Control Board, he knew quite a bit about what has been going on in the online gaming sector.
“As you continue to review iGaming and the related role in law enforcement, I can tell you confidently that your committee is now in a position to benefit from a significant amount of deliberation and contribution from many well-informed and experienced operators, regulators, technologists, and industry experts. Unlike 2009, we are no longer in Greenfield. We have learned a great deal in the past six years. The creation of enabling law and regulation in three states and a large number of informed studies and debates, as well as — and perhaps most importantly — the creation, testing and deployment of many iGaming systems throughout the world has created concrete knowledge that does now and should replace speculation.”
He alludes to that fact that this data which is so plentifully available should now be collected and reviewed. This could be a possible hint at what needs to be done before any future hearings occur.
By the end of the hearing, Chaffetz could only resort to repeating his opening lines of how it is “naive at best to think we can put up a wall on the Internet and think we’re not going to be able to penetrate this.”
All told the hearing went extremely well for those in favor of state-led online gaming decisions. Taking away the states individual rights to make this decision for themselves would go directly against the 10th amendment; so Chaffetz’ fellow committee members were right to question the sanity of such an amendment.