When the Republicans won the last election and Lindsay Graham, Jason Chaffetz and Marco Rubio were all put back in their appointments a colleague with a connection close to Capital Hill (I’ll call him Mr. X for this article) told me “it’s over for online casino gambling.”

Mr. X, who has been dealing with a gambling lobby for some time, said that there had been a plan concocted long before the election that would appease Sheldon Adelson while at the same time give something back to states and gamblers. According to Mr. X most Republicans, including Donald Trump, feel beholden to Sheldon Adelson for his large contributions to the party over the decades and they want to cede to his wishes on RAWA in a type of thank you. Few in the party believe American voters will care much if online casino gambling is halted in its tracks, so they won’t lose much political capital and at the same time they believe they can win favor with the states.

Mr. X suggested to me in November that the process would be a carrot and stick situation and the Republicans were going to offer a carrot by legalizing some form of gambling that is currently not allowed federally, but that in return they will ask for a halt to online casino games i.e. the stick.

“Adelson doesn’t care about sports betting, horse racing or even poker,” Mr. X told me 8 months ago. “He’s only concerned about slots, banked card games, craps and roulette which he believes will eat into Las Vegas Sand’s revenues. At the same time, he’ll try to halt all forms of online gambling where possible.”

I got in touch with Mr. X last night, after it was revealed that the U.S. Supreme Court was prepared to hear the state’s sports betting case and asked him if he was surprised. He said he wasn’t and it was just an expected step in the process. “I’m just surprised it took so long,” Mr. X stated. “But I suppose Jeff Sessions and Trump had to work out a plan with New Jersey officials and figure out the next steps.” Asked what those next steps are he was confident in his answer:

“The Supreme Court will rule that the current sports betting laws violates the 10^th amendment. Consequently, they’ll tell New Jersey that they can offer sports betting at race tracks as the state has requested. I doubt very much it will be a full repeal of PASPA but instead will allow for limited sports betting if it helps another industry already legal in the state. That means that race tracks and land-based casinos will be able to offer sports betting as a part of a “whole gambling package”. They’ll almost certainly limit that right to professional sports only, hence not a full repeal of PASPA, and they will make a requirement that betting has to take place in a current gambling establishment so sportsbooks will not be able to be set up like in England.”

That’s the carrot.

Here’s the stick.

Within a few months of this bill passing, Congress will introduce a new bill which will make all forms of online gambling illegal. It won’t be called RAWA but rather some bill that is not so confrontational, something like “the Internet gambling control bill.” Mr. X is confident that bill will be introduced prior to next year’s midterm elections. The bill won’t change the DoJ’s opinion, but will rather create a new requirement for online gambling that will effectively make it impossible for states to meet. This would likely put in measures that will require the state to oversee all aspects of any form of online gambling and will prevent any partnerships with non-American owned companies. With that stipulation and a hefty licensing fee it’s doubtful any online casinos will get off the ground. The only question in Mr. X’s mind is whether there will be a rule to grandfather in current states as happened with PASPA

“It will be very hard for the courts to tell New Jersey and Delaware that they can no longer offer online gambling which was passed legally in the state, but they might put in new rules to ensure that gambling remains there. Adelson has no interest in a New Jersey casino so he won’t lose sleep if they keep it, but he will want to ensure that Nevada never expands beyond poker which is what they are currently offering. More importantly he’ll want to make certain that the other 47 states never introduce online gambling since many of those states either have a Las Vegas Sands casino or Adelson may want to put one there.”

So, if Mr. X and other industry analysts are correct, the first step has just been taken to get a form of RAWA passed. For all his comments about not owing anyone anything it’s clear that Donald Trump does feel indebted to people who help him and Adelson is one of them. Let’s hope for American bettors Mr. X is wrong.

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