Congressional Meeting to Discuss RAWA Has Big Implications for New Jersey

On December 9th, a congressional hearing was held to discuss a bill that would ban online gaming nationwide.

The Restoration of America’s Wire Act, or RAWA, would rewrite the Federal Wire Act of 1961 by extending the Wire Act to include a ban on most forms of internet gambling, and would also reverse regulated iGaming laws in states like New Jersey, Delaware, and Nevada.

While RAWA’s purpose is to ban internet gambling, it allows certain exemptions including one for fantasy sports.

The bill is sponsored by U.S Representative Jason Chaffetz (R. Utah), Chairman of the House Committee on Oversight and Government Reform (OGR). Chaffetz argues that leaving the legalization up to the states won’t work because it is impossible to geolocate players or verify a player’s legal age.

Chaffetz made it clear that he refuses to believe that the features online gambling sites use to ensure proper and legal usage are anything but a myth.

During the hearing which was titled “A casino in every smartphone, law enforcement implications,” Rep. Chaffetz expressed his beliefs about state regulated iGaming.

“For anybody to argue that the internet can be walled off and used in just these certain boundaries, it’s a joke, come on.”

Who is in favor of the bill, and who is against it?

The RAWA legislation is backed by Las Vegas Sands Chairman Sheldon Adelson. Adelson has been public enemy number one for iGaming for quite some time.

In 2012 Adelson founded the Anti Online Gambling Coalition, which was formed primarily as a response to a position change on iGaming by the New Jersey Division of Gaming Enforcement.

In a press release posted by the Poker Players Alliance (The PPA), PPA Executive Director John Pappas spoke firmly against Adelson’s agenda.

“Let’s be honest, today’s OGR hearing is taking place to fulfill the wishes of Sheldon Adelson, not because of any law enforcement implications or concerns.”

Several members of the OGR Committee loudly expressed their disagreement for the bill. Rep. Mick Mulvaney (R. South Carolina) believes that RAWA violates individual states Tenth Amendment.

When South Carolina Attorney General Alan Wilson testified in favor of RAWA, Mulvaney scrutinized Wilson’s pro RAWA stance.

“I didn’t expect you to be on this side of this issue.”

Mulvaney continued to question Attorney General Wilson’s stance on RAWA, saying Wilson has always been opposed to federal intervention. By the end of the hearing even Wilson admitted that he had no real problem with intrastate gambling, as long as it’s truly confined to individual states.

Other members who openly disagreed with RAWA include Rep. Jody Hice (R. Georgia), Rep. Stephen Lynch (D. Massachusetts), and Rep. Dina Titus (D. Nevada). All of these representatives are in agreement that RAWA is a violation of an individual state’s Tenth Amendment rights.

What would happen if RAWA passed?

If RAWA passes, the negative impact on states where online gambling exists would be huge. Currently, three states have legal, regulated internet gambling: Nevada, New Jersey, and Delaware.

In New Jersey alone internet gambling has helped to create jobs and has produced a significant amount of tax revenue for the state. In 2014, New Jersey iGaming generated $18,464,535 in taxes. The loss of this revenue due to RAWA would have a substantial effect on the state.

New Jersey’s land-based casinos have been doing very poorly and several have closed leaving countless unemployed. RAWA would take away tax revenues and increase unemployment numbers.

OGR committee member Rep. Jody Hice (R. Georgia) stated that although he is ultimately opposed to all forms of gambling, RAWA does violate a states Tenth Amendment. The representative also believes that RAWA could potentially have a negative impact on Georgia. Georgia has recently begun the process of extending its lottery online and if RAWA passed online lotteries would be made illegal as well.

It should be noted that Sheldon Adelson, the financial supporter of RAWA, owns the Sands Casino in Pennsylvania – one of the properties that has been most successful in grabbing casino market share from Atlantic City. If Atlantic City casinos are significantly harmed by the loss of internet gaming revenues, his own bank account stands to gain.

About the Author

Rudee Rossignol

Las Vegas-based Rudee writes about a variety of topics, all surrounding regulated U.S. online gambling. A longtime poker player, she offers an on-the-ground take on Internet gaming matters.