Graham and Chaffetz bill seeks to strengthen and reinstate the Wire Act, this time specifically banning most internet gambling
After a week of hype, the Republican Party's Sen. Lindsey Graham of South Carolina and Rep. Jason Chaffetz from Utah, introduced the Restoration of America's Wire Act to the federal House and Senate on Wednesday, seeking to formalise the interpretation of the Wire Act as embracing all forms of internet gambling, and attempting to reverse a 2011 US Department of Justice policy decision that the Wire Act applies only to online sports betting.
The legislative proposal effectively bans all online gambling, with carve outs for horse racing.
It effectively overrides states' rights to decide on their own gambling laws, and contains no grandfather clauses in respect of online gambling regulatory regimes already operating in Nevada, New Jersey and Delaware, which could have massive financial and business implications if the bills pass.
At least ten other states are considering or have already implemented various forms of online wagering to raise tax revenues, and these could also be prejudiced.
The Associated Press news agency reports that each bill has co-sponsors from both parties, including Democrats Sen. Dianne Feinstein, and Rep. Emanuel Cleaver. Other known supporters of the bill, said to have been drafted by lobbyists working for land casino baron Sheldon Adelson, include Utah's Sen. Mike Lee and Rep. Jim Matheson, and New Hampshire Republican Sen. Kelly Ayotte, who said at a Capitol Hill press conference:
"What has been the result of this [Justice Department ruling]: basically, it's been the Wild West out there on the internet, which has been of deep concern for law enforcement."
The position of Senate Majority Leader and Nevada Democrat Harry Reid, who controls the Senate agenda, is unclear at present; in common with Nevada Republican Senator Dean Heller, and supported by the American Gaming Association, Reid has in the past sponsored a federal ban that exempts online poker – something which the Chaffetz and Graham bill does not support.
Chaffetz, said in a joint statement with Graham: "These fundamental [Department of Justice] changes [to its interpretation of the Wire Act] need to go through Congress. By restoring the original interpretation of the Wire Act, we are putting the genie back in the bottle and allowing for an open debate to take place."
Opposing the legislation is the Coalition for Consumer and Online Protection, largely funded by MGM Resorts, which contends that the proposed bill will make American consumers less safe by pushing online gaming into the shadows.
"There isn't any question whether Americans are gaming online. They are," said the coalition's chairwoman, former Rep. Mary Bono. "Congress should be focused on keeping them safe, not shutting down existing consumer protections.
"If Congress passes this bill, we'll see more Americans gaming on black market websites with absolutely no protections against fraud, identity theft and other criminal activity," she added.
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