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Lame Duck Congress Sparks Concern For Regulated Online Casinos

Will Adelson Finally Get To 'Restore America's Wire Act'?

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The stars may be aligning for billionaire casino owner Sheldon Adelson to actually have a chance to get his long-sought ban on internet gambling, which at times over the past three years appeared to be drawing nearly dead.

The current lame duck Congress could pass legislation to “restore” the 1961 Wire Act to put a stop to states legalizing online casinos and possibly end the industries in Nevada, New Jersey and Delaware. Though, shutting those down would result in lawsuits. Groups opposed to the ban have long argued that the prohibition tramples on states rights and establishes an ugly precedent.

There’s a spending bill that Congress could vote on by the end of the year that might be a vehicle used to insert an online gambling prohibition. There’s also fear that Jeff Sessions as U.S. Attorney General could eventually result in Department of Justice action to bolster the Wire Act, just a handful of years after the Obama DoJ watered down the law to allow states to legalize the activity and regulate it. The re-interpretation also gave the green light to online state lotteries.

Adelson has given historic amounts of money (nine figures) to Republican campaigns over the years, and legislation to prohibit online casino games over the internet would be a way to return the favor. Adelson has said that online casinos hurt the brick-and-mortar casino industry ($40 billion market in the U.S). Adelson’s Las Vegas Sands Corp. is the largest casino developer in the world based on revenue. The 83-year-old has a net worth around $30 billion.

Republican Congressmen such as Mike Lee, Charlie Dent, Tom Cotton, Jason Chaffetz and Lindsey Graham have backed the plan to ban online gaming. Adelson said in 2013 that he will “spend whatever it takes” to enact such a controversial law.

Earlier this month, Attorney Generals from 10 states penned a letter to President-elect Donald Trump and Vice President-elect Mike Pence urging them to restore the Wire Act.

The reassuring news is that stand-alone legislation to pass the prohibition has never had any success. The last hearing on such a bill was a year ago, when Chaffetz held a public discussion on his version of the legislative attempt. Prohibition advocates were thoroughly beaten.

Cotton introduced the latest stand-alone RAWA bill in September, though its details aren’t fleshed out yet. The purpose is clear, however, as the legislation seeks to “ensure the integrity of laws enacted to prevent the use of financial instruments for funding or operating online casinos are not undermined by legal opinions not carrying the force of law issued by federal government lawyers.”

Pennsylvania, Michigan, California, New York and Massachusetts are all looking at Las Vegas-style gambling on the web, which could be a $4 billion industry by 2020 if there’s no ban.