Join the OSGA Progressive Pick'em! Check the Contest standings!


Sheldon Adelson has a hard time selling RAWA




A hearing on the Sheldon Adelson backed "Restoration of America's Wire Act" showed most politicians displeasure with the bill and the reasons that it was introduced.

In the 1995 movie "The American President", there is a scene where Michael Douglas gives a speech to the media and the American public. After avoiding a character fight in the media with his main Republican foe Bob Rumson (played by Richard Dreyfuss), he finally decides to address the character assassinations Rumson was throwing at him in a classic speech.

"I've known Bob Rumson for years, and I've been operating under the assumption that the reason Bob devotes so much time and energy to shouting at the rain was that he simply didn't get it. Well, I was wrong. Bob's problem isn't that he doesn't get it. Bob's problem is that he can't sell it! We have serious problems to solve, and we need serious people to solve them. And whatever your particular problem is, I promise you, Bob Rumson is not the least bit interested in solving it. He is interested in two things and two things only: making you afraid of it and telling you who's to blame for it. That, ladies and gentlemen, is how you win elections. You gather a group of middle-aged, middle-class, middle-income voters who remember with longing an easier time, and you talk to them about family and American values and character. And wave an old photo of the President's girlfriend and you scream about patriotism and you tell them, she's to blame for their lot in life, and you go on television and you call her a whore."

Replace Bob Rumson with Sheldon Adelson, replace the President's girlfriend with the Wire Act and particularly those in the Department of Justice who voted to clarify it, and replace "ladies and gentlemen" with Republican Congressmen and Senators and you effectively have the exact situation with RAWA (Restoration of America's Wire Act). The Wire Act was passed in 1961 under the Kennedy Administration and its purpose was very clear. The government wanted a vehicle to arrest organized crime leaders who were using the telephone to book sports wagers and take horse racing bets which in turn was then laundered and used for other criminal activities. Along with the Travel Act it was deemed a very important legislation in stopping organized crime and terrorism on U.S. soil. The exact wording of the relevant section of the Wire Act is as follows:

"Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both."

In 2002 the Fifth Circuit Court in New Orleans gave its ruling that the Wire Act indeed only applied to sports betting but the DoJ under George W. Bush refused to accept that opinion, suggesting that the Wire Act was intended for all forms of gambling and as a result continued to issue arrests for non-sports related online wagering conducted over the Internet including sites like Party Poker and PokerStars. This continued until 2011 when the DoJ under the Obama Administration finally gave its ruling affirming the 2002 court decision and suggested "interstate transmissions of wire communications that do not relate to a 'sporting event or contest' fall outside the reach of the Wire Act," and consequently they weren't prepared to arrest anyone else under that statute which was offering online casino betting or poker.

chaffetz RAWAWhen that decision was made all the casino companies including Caesars, MGM and The Sands began to look at ways to introduce online gambling but it became quickly clear that the Sands would be a bit player in the online industry because it didn't have the same brand recognition outside of Nevada. Rather than determining how his company could make a bigger presence with this new opportunity Sheldon Adelson decided to simply to declare the 2011 opinion was wrong and find ways to make non-sports gambling illegal. Adelson was clearly concerned that online gambling would eat into his land based profits so he gathered a group of people together and started a group called the Coalition to Stop Internet Gambling (which ironically have a lot of religious groups who apparently have no problem with land based casinos but do online), created the website "stopinternetgambling.com" and got Jason Chaffetz, a Representative for Utah and Lindsay Graham, a Senator from South Carolina to introduce RAWA (Restoration of America's Wire Act) in Congress. The name of the bill of course is a complete misnomer because the Wire Act still exists. It was always intended to only involve sports betting and contests only but Adelson wants to return it to the days before 2011 when the DoJ wrongly arrested people not involved in sports betting and when there was complete confusion and inconsistencies about what the DoJ's role should be. Of course what Adelson is really hoping for is a return of the Republicans to office (he is by far and away the largest contributor to Republican candidates), and once that happens he wants the new DoJ to reverse the 2011 opinion and declare that the courts are wrong and the Wire Act applies to all online gambling. No doubt Adelson believes that his contributions and influence will land him that favor.

Like in Michael Douglas's speech he is preaching to Republicans on the Hill and Republican supporters that before the 2011 opinion there was morality in betting, that children were never able to wager, that compulsive gamblers were stopped before they lost their houses, that money laundering never took place and that unscrupulous operators could never get off the ground. The fact that none of that is true and that studies show those issues are for more prevalent in land based casinos than online is irrelevant. Like in Michael Douglas's speech, facts don't matter. He just wants those in Congress who are naïve or too lazy to look into the issue seriously to be afraid of online gambling and he wants them to believe that if the opinion was reversed then traditional Republican voters who turned away from them in 2008 and 2012 would come back in 2016.

Adelson has poured a lot of money into this effort but, as Michael Douglas suggested with Bob Rumson, Sheldon Adelson can't sell it. Most people who have looked into stopinternetgambling.com see it as a bunch of hogwash. The bill co-sponsors aren't appreciated by the majority of Americans. Chaffetz has been described in a few places as "a grandstanding charlatan" who has clashed with Planned Parenthood and the Secret Service and who represents a backward state that has banned alcohol and gambling to its citizens, two vices which most Americans approve of, but turns a blind eye to polygamy, which the vast majority of Americans find despicable. And Lindsay Graham is currently running at zero percent in his bid to become President, which speaks volumes about his popularity, even in his own party.

And as for the bill itself, a hearing this week at The House Oversight and Government Reform Committee showed how opposed most committee members are to this bill. In an information only hearing that was supposed to involve committee members welcoming the bill instead turned to a bi-partisan attack on both the bill and the reasons it was introduced. The concerns about geo-location and minors betting was debunked by committee members from Nevada and New Jersey, who said that it hasn't been a concern there where the activity has been taking place for a few years. And, almost in unison, there was a cry that this bill violated the 10th amendment, namely that the federal government was overstepping its boundaries by passing a law that is a state's issue since gambling has always been an issue for states to decide on whether it was related to lotteries, horse racing or casinos. Moreover the representative from the Virgin Islands stated that the UIGEA was the last time Congress spoke on the topic of online gambling and that the decision there to allow intrastate online gambling, by a huge margin, should be respected. Plus, it was the Republicans who wrote the regulations for that law which states that intrastate online poker and casino wagering is legal.

This nevertheless has not stopped Adelson from being combative. About 2 weeks ago, just prior to the committee hearing, Nevada Attorney General Adam Laxalt signed a letter from several Attorneys General supporting RAWA. Without going into great detail, because he had none, Laxalt suggested it was an overreach of the Executive Branch to pass their opinion. Not surprisingly Nevada Governor Brian Sandoval was disgusted by Laxalt's betrayal of his state which currently allows online gambling. Poker News Daily wrote that Sandoval stated he was "very concerned that anyone representing the state's legal interests would speak out against current state law in our leading industry," upon hearing of Laxalt's decision to support RAWA. Why Laxalt chose this route is uncertain, but someone close to Adelson told me that he can be very generous to those who are loyal to him which no doubt is the case here. That said most AGs support the DoJ's 2011 decision. Only 8 Attorney Generals, Maine's Janet Mills, Michigan's Bill Schuette, Missouri's Chris Koster, Nebraska's Doug Peterson, Nevada's Adam Laxalt, Oklahoma's Scott Pruitt, South Carolina's Alan Wilson, and South Dakota's Marty Jackley have signed the letter supporting RAWA.

The DoJ opinion in 2011 has to be applauded for finally clarifying how the Justice Department viewed the Wire Act and what they were prepared to do in terms of future online gambling related arrests. Just because he didn't like the decision doesn't give Adelson or his supporters the right to try and change that opinion by shaming the other Congressmen into supporting Adelson's disapproval. Fortunately it seems that the majority of those on the Hill aren't buying the fear mongering and polls indicate that most Americans approve of online gambling. It appears that while some Congressmen and Senators can be enamored to a position they probably don't believe in because of the "generosity of Adelson", most can't. Michael Douglas suggested in the movie that Bob Rumson was disgusting for waving a picture of his girlfriend and calling her a whore. In the case of RAWA it seems pretty clear who the whores are.

Read insights from Hartley Henderson every week here at OSGA and check out Hartley's RUMOR MILL!