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  • COMMENTARY: The Secret Plan to Ban Online Gaming

    Las Vegas billionaire Sheldon Adelson has found a way to ban internet gaming by using his friends in Washington to bury a provision into an appropriations bill that will ban internet gaming and gambling so that his casino can increase his profit margin.  Adelson is using his close friends in Washington to sneak a provision in an appropriations report to short circuit the legislative process, because he can’t get Congress to agree to passing his legislation through the traditional legislative process. This provision can be called the “Adelson Earmark.”

    Last year, Sen. Linsey Graham (R-SC) and Rep. Jason Chaffetz (R-UT) introduced versions of the so called “Restoration of America’s Wire Act (RAWA) at the behest of Adelson.  It was reported that a lobbyist the Las Vegas Sands, Adelson’s casino, employed wrote the bill for Sen. Graham and Rep. Chaffetz.  According to The Hill, “draft legislation to ban online gambling was obtained by The Hill last year. The document’s metadata revealed that a lobbyist for Las Vegas Sands wrote the bill.”

    This bill is an attempt to rewrite a federal law, the Federal Wire Act of 1961, to ban most forms of online gaming and gambling that is legal in some states.  A hearing was held on March 25, 2015 where opponents of the bill raised the issue that this new legislation would violate federalism.  Traditionally the states retain the police powers to regulate activities with a state’s borders. The new law is unnecessary, because states are perfectly capable of policing themselves and either allowing or not allowing online gaming and gambling.

    According to the Online Poker Report the bill does the following:

    The Department of Justice’s current position on the Wire Act as it applies to online gambling is that the Wire Act only applies to online sports betting.

    The use of the term “restoration” in RAWA’s title is a misnomer, as the original Wire Act, passed in 1961, could not (and did not) speak to the use of the Internet as a wagering medium.

    To better appreciate what an actual “restoration” of the Wire Act would resemble, refer to Michelle Minton’s recently-published paper that articulates the original legislative intent of the Wire Act.

    The bill received a chilly reception from Capitol Hill because it was a naked attempt to favor one gambling interest over another.  The motivation of casino magnate Adelson was not to protect consumers of online gambling and gaming from harm – he wanted to keep the gambling and gaming within the confines of his brick and mortar casino.

    News broke on April 26, 2016 on Gambling Compliance that the Senate Report on the CJS Appropriations bill contains language that is a back door attempt to pass RAWA.

    One paragraph in a 141-page Senate spending bill endorses the prohibition of Internet gambling, but it is unclear whether the language will boost efforts to overturn the historic 2011 opinion which opened the door for states to legalize online wagering.

    The provision is buried on Page 59 of Senate Report 114-239 of the “Departments of Commerce and Justice, Science, and Related Agencies Appropriations Bill, 2017” (CJS Approps) and states the following:

    Internet Gambling.—Since 1961, the Wire Act has prohibited nearly all forms of gambling over interstate wires, including the Internet. However, beginning in 2011, certain States began to permit Internet gambling. The Committee notes that the Wire Act did not change in 2011. The Committee also notes that the Supreme Court of the United States has stated that ‘‘criminal laws are for courts, not for the Government, to construe.’’ Abramski v. U.S., 134 S.Ct. 2259, 2274 (2014) (internal citation omitted).

    If RAWA was to become law, then the regulated gambling and gaming industry in the United States would be banned.  The federal law would overturn the decisions of many states to allow this type of activity.

    Because the full House and Senate has no appetite to pass RAWA, here is how the proponents of the bill will attempt to use insider influence to get this bill buried in either the CJS Approps measure or a Continuing Resolution at the end of the year.

    First, they have successfully buried a provision in the report language to accompany the Senate version of CJS Approps bill.  Rumors are that they will do the same in the House when the House marks up the CJS Approps bill in the House.  This is a sneaky way to legislate, because they will not put the actual legislative language of RAWA into either bill – they know they can’t.

    What they plan to do is to get these two bills passed with an accompanying report calling for the law to be changed to ban all gaming and gambling.  Then they will add the language into a conference report after the bills pass the House and the Senate.  This is called an “air drop,” because the House and Senate will never get to vote on this provision as an amendment.

    The legislative language will be buried in a giant conference report that will be presented to the House and Senate as a take-it-or-leave it proposition.  Insiders use this trick when they want to get something passed that does not have majority support.  They attach an unpopular special interest earmark to an appropriations bill in a way that makes it impossible for opponents to strip it out.

    The Senate and House rules don’t allow for a Representative or Senator to strip out provisions, because of the way the Senate and House deal with appropriations bills.  What will happen is that the Adelson Earmark will appear in the bill and it will be too late to do anything about it.

    It can be stopped by the American people and by liberty minded Representatives an Senators to call on the appropriators to not add this Adelson Earmark into the conference report.  They never vote on the reports that accompany appropriations bills and that is how earmarks used to be added to bills – in the report language.  Here, the report language will be used to justify a last minute addition to RAWA to the appropriations bill.

    Don’t let billionaire cronies of the Washington insiders use the power of the federal government to make themselves richer.  That is a shining example of Crony Capitalism that must end.  We can only hope that the defenders of freedom in the House like Reps. Justin Amash (R-MI) or Thomas Massie (R-KY) or freedom lovers in the Senate like Sen. Rand Paul (R-KY) will put the breaks on this special interest restriction of freedom.


    Cloakroom Confidential

    Cloakroom Confidential

    Cloakroom Confidential was a longtime Capitol Hill staffer and insider who has contacts in the House and Senate at the highest levels.

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