House Judiciary Committee May Hold iGaming Hearing During Lame Duck

According to a report by Gambling Compliance (paywall article is located here) the House Judiciary Committee, chaired by UIGEA architect Bob Goodlatte (R-VA), may host a hearing on a potential online gambling ban when Congress reconvenes following the midterm elections.

According to Gambling Compliance, the hearing could serve two purposes.

The first would be to appease Adelson, one of the GOP’s biggest political donors. While gambling bills, particularly online gambling bills are not votes many members of Congress want to take considering their paradoxical elements – pitting state’s rights against social conservatism – a hearing doesn’t put lawmakers on the record either for or against the measure.

The second purpose could be to shield Congress from criticism if an online gambling ban is somehow passed.  Unlike the criticism Congress received following the passage of UIGEA (which was attached to the Safe Ports Act of 2006 literally in the middle of the night), a House Judiciary hearing debating the merits of RAWA allows Congress to make the case that the bill (or some version of it) wasn’t passed in a clandestine manner.

Rumors of a potential “November Surprise” have been kicking around since September, when the first reports that Congress might take up Sheldon Adelson’s Restoration of Americas Wire Act (RAWA) during the “Lame Duck” session came into being.

Still, a lot of pieces have to fall into place for RAWA to make its way through Congress.

A lot has changed since December 2013

The last online gambling hearing at the federal level occurred in December of 2013, where Sheldon Adelson’s mouthpiece Andy Abboud received a severe dressing down by members of the House Energy and Commerce subcommittee, particularly, Chairman Joe Barton (R-TX) and Jan Schakowsky (D-IL).

Since that time things have changed, and not for the better if you’re an iGaming advocate.

The hearing in 2013 came on the heels of the fairly successful launch of online gambling in New Jersey (which was preceded by Delaware and Nevada), and during the December 2013 hearing American Gaming Association (AGA) President Geoff Freeman spoke at length in favor of federal legalization of online gambling.

But just a year later the entire landscape has changed, and instead of a possible federal bill legalizing online gambling we are fighting against an online gambling ban, and the AGA has decided this is a fight they don’t want to be involved in.

Could an iGaming ban really pass Congress?

While nothing is out of the question, especially during a Lame Duck session, a bill for or against online gambling still seems like a long shot – and as GC is reporting, casinos corporations are fighting to keep the feds out of this fight, preferring to leave legislation up to the states.

The chances that some form of RAWA move through Congress during the Lame Duck will come down to three things in my opinion.

#1: How many seats change hands

The more outgoing members of Congress the better the chance RAWA has of progressing through both Houses of Congress. When political careers are over (read as: losing an election) legislators no longer have to worry about their public polling numbers and can either vote their own will, or perhaps do someone a solid – especially if that solid could land them a sweet job post-Congressional career.

The more Lame Ducks that are in Congress during the Lame Duck, the more concerned we should be about a possible online gambling ban passing.

#2: How many seats the Republicans gain

While Republicans are no more likely to be for or against online gambling than democrats they are far more likely to owe allegiance to Sheldon Adelson. And in most cases Adelson probably played some role in getting them reelected, and can also be a strong ally or opponent when they are up for reelection.

#3: Harry Reid

This is the real wild card in the whole mix. If Adelson wants something passed he has to have Reid’s support.  Reid’s support will likely be influenced by who controls the senate after November 4th, and also by how much Sheldon Adelson is willing to compromise on various carveouts.

Reid has been trying to pass an online poker bill (with bans on other casino games) since 2010, and is expected to try once again this year.

Gambling Compliance is reporting that Tom Cole (R-OK) “warned tribal officials last month that Reid is more likely to move aggressively on Internet gambling if Republicans win majority control of the Senate on Election Day.” This could mean that Reid will be more amenable to Adelson should his title turn into “Minority Leader” after the elections.

On this front, the Poker Players Alliance (PPA) Vice President of Player Relations Rich Muny has wondered where Reid’s allegiances will lead him if online poker is off the table and he has to choose between a complete ban or the status quo.

What about the president?

Where does the last line of defense stand on this issue? At this point it’s quite unclear, considering the wishy-washy answer the President’s office gave on this issue back in May of 2012 when over 10,000 people signed a White House petition asking for the President’s position on online poker, which was written by Brian Deese, who was at the time the Deputy Director of the Economic Council:

“The Administration understands that many Americans engage in paid online poker games for entertainment purposes. Online gambling on sporting events or contests violates federal law. The legality of other forms of online gambling is dependent upon the law of the states where the bettor or gambling business is located. It is left to each state to determine whether it wishes to permit such activity between its residents and an online poker business authorized by that state to accept such wagers, but online gambling that is not authorized by state law may also violate federal statutes.

“The rapid and anonymous nature of the internet distinguishes online games from onsite games, such as those in casinos, and creates distinct challenges. For example, there are many means of technologically circumventing restrictions on online gambling that can allow individuals from countries where gambling is illegal — or even minors — to play using real currency. Online games also have greater potential for fraud because gambling websites are much cheaper and easier to establish than on-site locations, and like telemarketing scams, can appear and disappear overnight. Finally, online gambling can be used in money laundering schemes because of the volume, speed, anonymity, and international reach made possible by internet transactions. The Administration will continue to examine this issue and is open to solutions that would help guard against the use of online gambling sites as tools for conducting illegal activities or preying on unsuspecting individuals to the extent that online gambling is permitted.”

Not a glowing endorsement, but then again, it’s not a blistering repudiation either.

If a bill does pass Congress a presidential veto is far from a given, as President Obama hasn’t proven himself to be an ally of online gambling. However, I wouldn’t rule out such a veto either. President Obama would be no fan of the coalition that passes this bill and could always do so on the state’s rights grounds cited in the White House’s official response to the May 2012 petition.

About the Author

Steve Ruddock

Steve is a seasoned veteran of the online gambling industry, having written about it from every possible angle in his many years as a freelance gaming writer. Based in Massachusetts, Steve especially focuses on regulatory and legislative news coverage pertaining to the U.S. market.