Two US Senators Are So Bullish On Online Gambling, They Want To Try To Ban It (Again)

Two US senators are asking the DOJ to revisit and withdraw its 2011 legal opinion that paved the way for US states to legalize and regulate online gambling.

Two US senators want online gambling out of New Jersey and other states that have passed similar laws regulating it.

Sens. Diane Feinstein (D-CA) and Lindsey Graham (R-SC) are asking the US Department of Justice to revisit and withdraw its 2011 legal opinion on the Federal Wire Act that paved the way for the first four states in the country to legalize and regulate online gambling.

The two senators sent a letter to Deputy Attorney General Rod J. Rosenstein on Nov. 21 claiming that unless the DOJ revisits the opinion, they predict online casinos will soon “sweep across our country.” Feinstein and Graham want the question of whether online casinos should be permitted in the US to be left up to Congress to decide, and not individual states.

The Federal Wire Act and US online gambling

In December 2011, the DOJ released a legal opinion that 1961 Federal Wire Act only applies to sports betting. This paved the way for individual states to begin to consider online lottery sales, and ultimately, online gambling legislation.

Since that time, four states have passed online gambling legislation. There are legal online gambling markets in Delaware and Nevada, in addition to New Jersey online casino sites. In October 2017, Pennsylvania became the fourth state to enact online gambling legislation.

This latest alarmist letter from Feinstein and Graham is a follow-up to one from three years ago in which the two wrote the DOJ opinion could turnevery smartphone, tablet, and personal computer in our country into a casino available 24 hours a day, 7 days a week.”

The letter also claims online gambling preys upon children and society’s most vulnerable. However, it contains no evidence backing up that statement.

The letter contains at least one one glaring error where Feinstein and Graham claim the DOJ opinion “reversed 50 years of interpreting the Wire Act to prohibit all gambling online.” Both the internet and online gambling are not yet 50 years old.

The letter also seems to stand behind the Federal Bureau of Investigation conclusion that online casinos are vulnerable to a variety of criminal schemes, including money laundering. However, those claims from the FBI in 2013 appear to be referring to offshore online gambling operations, not online casinos legalized and regulated by US states.

Bullish on online gambling

While the letter is intended as a move against states which have legalized and regulated online gambling in the US, the online gambling industry can take solace in how bullish Feinstein and Graham appear to be on the internet casino market.

The letter suggests other states are lined up to follow suit after Pennsylvania passed online gambling legislation. It also calls the internet online gambling industry robust and predicts online gambling will soon sweep the nation.

Efforts rewrite the Federal Wire Act to ban most forms of online gambling have been around since 2014. Bills have been introduced in both chambers of Congress, but failed to advance.

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NetEnt Strikes Content Distribution Deal With PokerStars NJ

NetEnt has announced that it’s providing content for New Jersey’s newest online poker room – PokerStars. The Amaya subsidiary is launching on March 21.

Amaya, the owner of online poker room PokerStars, has signed a content distribution deal with Swedish game developer NetEnt. The agreement means NetEnt will be the first content provider of both mobile and desktop games for PokerStars NJ.

PokerStars opens for business in New Jersey on March 21. The deal between the two companies isn’t very surprising considering NetEnt provides content to many Amaya subsidiaries in Europe.

NetEnt content is currently provided to multiple NJ online casinos through a New Jersey Division of Gaming Enforcement transactional waiver. NetEnt has contracts with Borgata, Golden Nugget, Resorts Casino, Tropicana, Virgin, and Caesars.

In NetEnt’s announcement, Björn Krantz, Managing Director of NetEnt Americas, spoke positively about the new business relationship between the two companies:

“I am very pleased that we have been able to extend our successful partnership with Amaya’s extremely popular gaming brand PokerStars to also include the regulated online casino market in New Jersey.

PokerStars is one of the biggest online gaming powerhouses in the world, and the agreement is yet more proof of the trust and confidence that exist in NetEnt’s operational and portfolio capabilities. I am confident that PokerStars’ US player community will enjoy the enhanced player experience offered through our game portfolio.”

Online gambling proving easier to manage than land-based casinos

Since the legalization of New Jersey online gambling in 2013, operators have worked hard to show online gambling in a positive light. The industry has done an excellent job keeping its record blemish-free, thus making it difficult for opponents to criticize it.

Perhaps the biggest criticism from anti-gambling advocates before the industry launched was that it would be impossible to prevent underage gambling from happening online. However, there have been no reported instances of underage play since NJ’s online gambling legalization.

The same can’t be said of live casinos. Somewhat ironically, iGaming opponent Sheldon Adelson’s Sands Casino in Bethlehem, Pennsylvania was just fined $36,000 for an underage gambler violation in January 2016.

This incident at Sands wasn’t the first time the casino has encountered this particular problem – it has been fined multiple times for underage gambling violations.

Are opinions on RAWA changing?

Rumors have been circulating recently that Adelson may have had a change of heart on regulated online gambling within the United States. The change might mean that Sands’ crusade to pass the Restoration of America’s Wire Act (RAWA) may be put on hold, at least for now.

Andy Abboud, VP of Government Relations for Las Vegas Sands, hinted about his company’s stance in an interview with Gambling Compliance (paywall):

“We haven’t backed off of our focus on [RAWA], but we need to find a way … to be able to shut down illegal offshore operators.”

Although Sands isn’t completely changing its position on RAWA, it is certainly changing its focus. It seems the growing popularity of online gambling has made Adelson refocus on an actual problem – unregulated offshore gambling.

The regulated online gambling industry in the U.S. can breathe a sigh of relief that a multi-billionaire will be spending a bit less cash (or perhaps none at all) on attempts to shut down their businesses. The industry will no doubt be watching Mr. Adelson’s actions closely in case he has yet another change of heart.

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.

Rally For Online Gambling Ban Falls Flat On Its Face

A panel touting the Restoration of America’s Wire Act and an online gambling ban fell well short of expectations.

Competitive Enterprise Institute fellow (and vocal Restoration of America’s Wire Act critic) Michelle Minton decided to attend a recently held policy forum to discuss the Sheldon Adelson inspired online gambling prohibition. The meeting took place at a townhouse on Capitol Hill and was hosted by The Keelen Group, a lobbying firm in the employ of Adelson.

After reading through Minton’s firsthand account of the meet-up, the most accurate portrayal of the policy forum would be to say it started off as underwhelming, and devolved into the theater of the absurd.

Some prominent names attended the RAWA forum

This is a bit odd considering the lobbyists sent to speak at the policy forum to tout the necessity of RAWA were some pretty heavy hitters:

  • Former Congressman Connie Mack
  • Former Congressman J.C. Watts
  • Capitol Counsel lobbyist Aaron Cohen
  • The Keelen Group’s president and founder Matt Keelen
  • Darryl Nirenberg of Steptoe & Johnson

According to Minton, four of the speakers are registered lobbyists for Las Vegas Sands Corp., and the fifth, Watts, was hired by Adelson’s dedicated anti-online gambling lobby group, the Coalition to Stop Internet Gambling. Minton also named Nirenberg as the author of the original Restoration of America’s Wire Act bill introduced in 2014.

And the meeting gets smaller…

Considering the money Adelson has spent on this issue, and the high-profile lobbyists that would be speaking, Minton was surprised to learn she was just one of four attendees to the policy hearing, and even more surprised to discover two other attendees were also RAWA critics. So for those of you counting at home, there were five scheduled speakers and four attendees in the room, three of whom were there to keep tabs on the opposition.

That leaves just a single person, a congressional staffer for an unnamed member, who was in attendance on their own accord. And we don’t really know what his motivations for being there were either.

By the time the meeting was 20 minutes old, that lone person was the only one (not scheduled to speak) still left in the room, as despite the low turnout, the hosts decided having several detractors in the crowd was not in their best interest.

Minton was the first person they approached and asked to leave, claiming the meeting was for staffers only. Minton quietly left, despite having requested to attend, and being given the ok that very morning. She was soon joined by one of the other RAWA critics, a representative for the Taxpayer Protection Alliance. Later she learned the third person, a PR person for another anti-RAWA group, was also asked to leave.

Lobbying money well spent?

Minton estimates that Adelson has handed these particular lobbyists and their firms over $1 million to push his anti-online gambling agenda, and it appears they’ve managed to reach a single congressional staffer. Money well spent.

This reminds me of something lobbyist Bill Pascrell III said on a panel at the Global Gaming Expo concerning lobbyists. Paraphrasing his soliloquy, but trust me, he said it much better: “Before Black Friday I saw these lobbyists lead the big online poker sites around Capitol Hill. They did a good job taking their money and selling them on getting online poker legalized, but in the end they got nothing. Now I see these same people leading Adelson’s people around Capitol Hill making the same promises.”

And Pascrell III should know, being a lobbyist and all.

New Jersey Lottery Has Problem Online Gambling Doesn’t: Underage Players

The New Jersey Lottery kicked off its “Not 18 Yet? No Bet” awareness campaign, in contrast to the fact that online gambling has almost no underage problems.

The New Jersey Lottery recently kicked off its “Not 18 Yet? No Bet” awareness campaign in an attempt to curb playing of lottery games by teens and children.

‘Responsible Gaming Education Week’

The lottery and the Council on Compulsive Gambling of New Jersey kicked off what is now an annual push to stop underage lottery play. It came during the American Gaming Association’s Responsible Gaming Education Week, which is Aug. 3-7.

More from the announcement:

As part of its effort, the New Jersey Lottery has developed a “Not 18 Yet? No Bet” brochure aimed at retailers and players that provides information about the major types of teen betting, as well as ways to recognize signs of a gambling problem early on. The brochure also tells concerned individuals where to go for advice and help. It is available at each of the more than 7,000 Lottery retailer locations, at all Lottery sponsored exhibits and events and through the website.

It’s not clear how many people who are underage attempt to or are successful at playing lottery games, but it’s obviously a non-zero number.

“Right now, the Council on Compulsive Gambling of NJ is in the midst of a major expansion of its community and school-based outreach programs,” CCGNJ Executive Director Neva Pryor said. “One of our focuses this year will be on preventing the onset of gambling addiction among adolescents and young adults, so the NJ Lottery’s message and support is particularly timely.”

Lottery a problem, iGaming less so

The lottery push stands in contrast to the fact that underage online gambling in New Jersey is almost a non-existent problem:

  • The forces behind the Restoration of America’s Wire Act — a bill that would ban online gambling nationwide — “has been unable to produce evidence that regulators in Nevada or New Jersey or the sites operating … allow minors.” (Story)
  • “There has not been a single documented case of underage gambling … in year one, per the New Jersey Division of Gaming Enforcement.” (Story)

Despite the success with preventing underage users in jurisdictions that have regulated iGaming, the possibility of kids gambling online is consistently a talking point for opponents, like the Coalition to Stop Internet Gambling. Yet, RAWA looks to carve out state lotterys from other types of online gambling.

It’s unlikely teenagers are playing the lottery in massive numbers. But it also seems safe to assume a lot more of them are playing the lottery than are gambling online.


Lesniak, Whelan Write Letter to House Urging Defeat of RAWA

Two New Jersey state senators that are instrumental in expanding gambling in New Jersey wrote members of the U.S. House this week urging federal lawmakers to defeat the Restoration of America’s Wire Act (RAWA).  New Jersey State Senators Ray Lesniak and Jim Whelan signed the letter that was obtained by John Brennan at Meadowlands Matters.

The letter asks U.S. House members to defeat HR 707.  This bill would strip New Jersey of its right to regulate and legalize online gambling, a business it entered in November 2013.

Not only would this bill do nothing to curb unlawful online gaming, it would push dangerous black market vendors further into the shadows, putting adult consumers and children at even greater risk.

The letter goes on to state that RAWA does the opposite of its alleged intent:

In fact, the best way to deter dangerous criminal activity – including fraud, money laundering and terrorist financing – is to establish a well-regulated online gaming industry like the ones that have been implemented in New Jersey, Delaware and Nevada, as well as in many other jurisdictions in North America and around the world.

Lesniak and Whelan content that Congress already resolved this issue in 2006 and that New Jersey would lose important tax revenue and suffer economic loss if RAWA became law.