Restoration of America’s Wire Act (RAWA) Introduced In Congress

Home » Poker News » Restoration of America’s Wire Act (RAWA) Introduced In Congress

Thursday, March 27th, 2014 | Written by Shane Larson

On Wednesday, the Restoration of America’s Wire Act (RAWA) was introduced to the Senate by U.S. Senator Lindsey Graham (R-South Carolina) and to The House of Representatives by Representative Jason Chaffetz (R-Utah). If passed the identical bills will reinstate an earlier interpretation of the Wire Act to prohibit all forms of online gambling.

The RAWA, originally called the Internet Gambling Control Act when in its draft form, is in step with the stated aims of billionaire anti-online gambling crusader Sheldon Adelson and his lobbying group the Coalition to Stop Internet Gambling.

“The attorney general’s office in my view made a huge legal misstep, and those of us in Congress who are worried about the effect of online gambling are going to push back. Those who think it’s a good idea will have their say,” explained Senator Graham during his news conference.

Exceptions for lotteries, horse racing and fantasy sports

According to the bill not all forms of online gambling are considered bad, however, and possibly aware that a bill restricting the sale of online lottery tickets would not receive much support from those states heavily dependent on this type of gambling, the RAWA has included an exemption for lotteries. As an excerpt of the bill states:

“Nothing in this act..shall be construed..to alter, limit or extend ..the ability of a State licensed lottery retailer to make in-person, computer-generated retail lottery sales under applicable Federal and State laws in effect on the date of the enactment of this Act.”

In addition, RAWA further exempts Internet betting on fantasy sports and horse racing, a move that would otherwise have likely received significant resistance from Senate Minority Leader Mitch McConnell, whose home state of Kentucky receives millions of dollars in online bets each year from its horse racing industry, with the state known the world over for its prestigious race the Kentucky Derby.

No exceptions for online poker

Online poker, however, has specifically been given short shrift in the Restoration of America’s Wire Act and would be banned, with even the present regulated states of Delaware, Nevada and New Jersey not receiving a special carve out clause. This flies in the face of previous precedents, such as the “Professional And Amateur Sports Protection Act“ of 1992 which banned all sports gambling in the USA with the exception of the then existing sports betting markets of Delaware, Montana, Oregon, and Nevada.

What chance of success do these bills have?

Not surprisingly, it will be in the interest of numerous online poker interests to ensure the federal ban does not make it out of committee, such as Senate Majority Harry Reid (D-NV), who supports a regulated internet poker industry in his home state of Nevada. The state’s Governor Brian Sandoval also expressed his opposition to the bill, stating:

“Gaming regulation is the responsibility of state government. Nevada has performed this function for decades and maintains an experienced, sophisticated and respected regulatory structure. This legislation would infringe upon states’ rights and attempt to undermine existing state law.”

With the backing of Harry Reid needed to ensure the bill clears the Senate, there is currently widespread belief that the Senate may propose a compromise bill, such as one which appends a poker carve-out. As U.S. Senator Lindsey Graham told the Las Vegas Sun, “If you want to have a poker exception, offer an amendment and see if it will pass.”

Bill unable to stop spread of unregulated igaming

Nevertheless, many opponents of the bill have pointed out that even in the event of a ban on online gambling, funds that could have been funneled toward state coffers will instead continue to be directed towards unlicensed, untaxed offshore operators. These US-friendly poker sites generated around $3 billion in revenues for 2012, with analysts asserting the prudent path to follow would be to regulate and tax the industry, while enforcing strict protection for consumers. It has even been estimated that a thriving US online gambling industry could be worth over $7.4 billion by 2017, which would be equal to around 30% of the future global online gambling market.

As Mary Bono, chairwoman of the Coalition for Consumer and Online Protection, explains: “It’s really simple. This ban on all Internet gaming would make American families and consumers less safe online. There isn’t any question whether Americans are gaming online. They are. Congress should be focused on keeping them safe, not shutting down existing consumer protections.”