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October 30, 2014

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Politics:

No poker exception in new legislation in Congress to ban online gaming

Authors of the new online gaming bill in Congress have issued a challenge to Nevada, where online poker is legal, and any state that may want to legalize it.

“If you want to have online gambling, then come to the Congress. ... If you want to have a poker exception, offer an amendment and see if it will pass,” said Sen. Lindsey Graham, R-S.C., who introduced the bill today along with Rep. Jason Chaffetz, R-Utah.

The bill, on its face, is simple: It would roll back the 1961 Wire Act to the days before late 2011, when all transactions for online gaming were illegal.

But dig into the details, and it seems certain that this three-page piece of legislation is going to inspire some pretty heavy political conflict.

For the past few congressional cycles, the online gaming conversation has revolved around legalizing Web-based poker while rendering all other forms of online gaming illegal. Senate Majority Leader Harry Reid, D-Nev., has led those efforts, arguing poker is a special case because it is a game of skill — not to mention that legalizing online poker federally would likely boost Nevada game operators' bottom lines.

But there is no poker carve-out in this bill — and sponsors say that if presented with the option, they would vote against it.

Graham and Chaffetz argue that the interpretation of the 2011 Wire Act reading is wrong not simply because they are opposed to online gaming, but because the decision went over the head of Congress, undoing their understanding of existing law.

And although the bill has no poker carve-out, it does contain one exception — betting on horse races online, along the lines of the Interstate Horse Racing Act of 1978. That type of provision was seen as key, in previous years, for being able to secure the support of Senate Minority Leader Mitch McConnell, whose home state of Kentucky has a financial interest in it.

Chaffetz denied that the bill’s drafters were being selective with which lawmaker’s pet issues they were allowing into the bill.

Chaffetz also dismissed the suggestion that the timing of the legislation is related to a recent announcement from Nevada and Delaware that they would join forces on a joint-online poker venture. The interstate partnership is the first to emerge under the new interpretation of the Wire Act.

The bill does not grandfather in the laws in states that have legalized online gaming — Nevada, Delaware and New Jersey.

Finally, there’s the matter of Sheldon Adelson, who has been pushing an anti-online gaming message for the past several months. Chaffetz and Graham deny that the bill is in deference to the casino magnate and deep-pocketed Republican donor, but don’t entirely shrug off the potential association.

“Sheldon has aligned himself with most Baptists in South Carolina,” Graham said, when asked about the association of his efforts with Adelson’s campaign. “I’m on solid footing with the people of South Carolina that I represent. The fact that Sheldon is on board is a good thing.”

South Carolina rolled back its laws allowing video poker machines in 2000, after 25 years of them being legal. It’s the precedent he points to when asked whether requiring Nevada, Delaware and New Jersey to roll back their new laws is a fair move.

Reid and Sen. Dean Heller, R-Nev., who also supports a poker carve-out, have stayed relatively quiet about the Chaffetz-Graham legislation, saying they disagree with it but will wait and see how it develops.

Meanwhile, Republicans who announced the introduction of the bill are beginning to build support for it. Their first major Democratic supporter is Sen. Dianne Feinstein of California, who is the chief co-sponsor of the Senate version of the bill.

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