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When Sen. Lindsey Graham announced his run for the presidency he had limited support but one of his donors was none other than Las Vegas casino owner Sheldon Adelson.  That should come as no surprise.  After all, Graham is the chief sponsor of Adelson's legislation to outlaw is competition -- state regulated online gaming. 

New Jersey, Delaware and Nevada have all exercised their power under federalism to legalize online gaming for their residents.  Other states like Illinois and Georgia sell lottery tickets online.  Adelson views this as competition for his brick and mortar casino empire.  His lobbyist, according to the Washington Post, drafted legislation to override state law and the bill was introduced by Sen. Graham.

After conservative groups and conservative champions like Mick Mulvaney noted that the bill trampled on the Constitution, was an example of cronyism and would ultimately promote efforts to regulate the Internet, the bill seemed dead.  Then Graham insert language into a major spending bill that just passed the Senate.  

The Daily Surge notes:  

Las Vegas billionaire Sheldon Adelson has found a way to ban internet gaming by using his friends in Washington to bury a provision into an appropriations bill that will ban internet gaming and gambling so that his casino can increase his profit margin.  Adelson is using his close friends in Washington to sneak a provision in an appropriations report to short circuit the legislative process, because he can’t get Congress to agree to passing his legislation through the traditional legislative process. This provision can be called the “Adelson Earmark.”

Last year, Sen. Linsey Graham (R-SC) and Rep. Jason Chaffetz (R-UT) introduced versions of the so called “Restoration of America’s Wire Act (RAWA) at the behest of Adelson.  It was reported that a lobbyist the Las Vegas Sands, Adelson’s casino, employed wrote the bill for Sen. Graham and Rep. Chaffetz.  According to The Hill, “draft legislation to ban online gambling was obtained by The Hill last year. The document’s metadata revealed that a lobbyist for Las Vegas Sands wrote the bill.”

This bill is an attempt to rewrite a federal law, the Federal Wire Act of 1961, to ban most forms of online gaming and gambling that is legal in some states.  A hearing was held on March 25, 2015 where opponents of the bill raised the issue that this new legislation would violate federalism.  Traditionally the states retain the police powers to regulate activities with a state’s borders. The new law is unnecessary, because states are perfectly capable of policing themselves and either allowing or not allowing online gaming and gambling.

According to the Online Poker Report the bill does the following:

The Department of Justice’s current position on the Wire Act as it applies to online gambling is that the Wire Act only applies to online sports betting.

The use of the term “restoration” in RAWA’s title is a misnomer, as the original Wire Act, passed in 1961, could not (and did not) speak to the use of the Internet as a wagering medium.

To better appreciate what an actual “restoration” of the Wire Act would resemble, refer to Michelle Minton’s recently-published paper that articulates the original legislative intent of the Wire Act.

The bill received a chilly reception from Capitol Hill because it was a naked attempt to favor one gambling interest over another.  The motivation of casino magnate Adelson was not to protect consumers of online gambling and gaming from harm – he wanted to keep the gambling and gaming within the confines of his brick and mortar casino.

News broke on April 26, 2016 on Gambling Compliance that the Senate Report on the CJS Appropriations bill contains language that is a back door attempt to pass RAWA.

One paragraph in a 141-page Senate spending bill endorses the prohibition of Internet gambling, but it is unclear whether the language will boost efforts to overturn the historic 2011 opinion which opened the door for states to legalize online wagering.

The provision is buried on Page 59 of Senate Report 114-239 of the “Departments of Commerce and Justice, Science, and Related Agencies Appropriations Bill, 2017” (CJS Approps) and states the following:

Internet Gambling.—Since 1961, the Wire Act has prohibited nearly all forms of gambling over interstate wires, including the Internet. However, beginning in 2011, certain States began to permit Internet gambling. The Committee notes that the Wire Act did not change in 2011. The Committee also notes that the Supreme Court of the United States has stated that ‘‘criminal laws are for courts, not for the Government, to construe.’’ Abramski v. U.S., 134 S.Ct. 2259, 2274 (2014) (internal citation omitted).

If RAWA was to become law, then the regulated gambling and gaming industry in the United States would be banned.  The federal law would overturn the decisions of many states to allow this type of activity.

Because the full House and Senate has no appetite to pass RAWA, here is how the proponents of the bill will attempt to use insider influence to get this bill buried in either the CJS Approps measure or a Continuing Resolution at the end of the year.

The House Appropriations Subcommittee Chaired by Texas Rep. John Culberson will be holding a mark-up on the bill next week.  Culberson should reject this crony giveaway to a billionaire.  

Rep. Jason Chaffetz, who is carrying water for casino-owning billionaire Sheldon Adelson, has announced he will be hosting a press conference tomorrow with former Rep. J.C. Watts (who is also a paid lobbyist for Adelson) and a handful of conservative organizations to push for his nationwide ban on states legalizing online gaming for their residents.  Nearly 25 conservative and liberty-minded groups have come out in opposition to the Chaffetz bill.  This afternoon, the American Conservative Union (ACU) blasted the groups that are selling out constitutional principles.  ACU Executive Director Dan Schneider issued the following statement reminding social conservatives that support for the Constitution must take precedent over their opposition to gambling:

Social conservatives all understand that gambling harms some people.  The only question for us is if the heavy hand of the Federal government should be brought to bear in this instance or whether the 10th Amendment to the Constitution should permit states to exercise their police authority.  

It is deceitful to imply that any bill in Congress would or could ban online gambling. There are already many gambling opportunities which are legal and widely available, but left untouched by the Restoration of America's Wire Act. Fan Dual and Draft Kings are just two examples. Similarly, people have been legally allowed to bet on horse racing for many years, and that wouldn't change under this bill.

As strong supporters of the 10th Amendment, the American Conservative Union does not see the kind of broad-based harm to justify Federal intrusion into the rights of states to govern themselves.  We must never forget that when we grow the power of the Federal government to limit people's freedoms, we also empower it to mandate other aspects of our lives.  From the Little Sisters of the Poor to those who wish to feed the hungry in their communities, Americans are now required to violate their conscience precisely because we have failed to reign in the Federal behemoth.  

Moreover, it does not make sense to allow some types of online betting while prohibiting others.  It’s not Congress’ job to pick winners and losers.  Using the Federal government to target certain competitors may be very good for the profits of some favored businesses, but it is by no means an appropriate way to set policy.

Those who are supporting the latest efforts to bring the Federal government into this arena ignore the inevitable results: gambling will continue online both domestically and on sites run by operators in the Caribbean, China, and Russia.  The Web has become a place where many vices flourish but banning certain US companies from this space cedes market dominance to foreign countries and dubious sites. 

Although we understand the substantial downsides to irresponsible gambling, it is not a proper use of the Federal government to preserve the profits and success of a single company’s business plan. 

Conservatives recognize and understand that each state should set its own policies under the rights guaranteed by 10th Amendment to the U.S. Constitution.  Conservatives trust the states to know what is right for each state.  Furthermore, conservatives trust our fellow Americans to understand that all people should be treated equally under the law with favoritism toward none. 

Schneider is spot on.  The Tenth Amendment empowers states to make their own decisions.  Conservatives and libertarians don't have to agree with those decisions but should respect them.  They should also oppose any and all efforts to gut the Bill of Rights -- especially to please a crony businessman who just wants to eliminate one form of competition for his billion dollar empire.  

Members of Congress are attempting to use a 1960s-era law governing organized crime and sports betting to regulate one of the Internet-age's favorite pastimes: online gambling. New analysis by Competitive Enterprise Institute consumer policy expert Michelle Minton delves into the history of the “Federal Wire Act” and why it was never meant to apply to online poker in the 21st century.

“Anyone concerned about over-criminalization or federal government encroachment on states rights should beware of this campaign aimed at eliminating online gambling," said Minton, author of “The Original Intent of the Wire Act and Its Implications for State-based Legalization of Internet Gambling,” published by the Center for Gaming Research at the University of Nevada, Las Vegas.

"Because anti-gambling lawmakers have repeatedly failed to pass a stand-alone federal ban on Internet gambling, they are now attempting to stop states from legalizing and regulating that activity," said Minton. 

“Back in 1961, Robert Kennedy wanted to cut off the mafia’s profit stream, especially its most profitable activity, their gambling racket,” Minton added. "This is clearly a different goal than what lawmakers are trying to curb today."

President Obama's Department of Justice stated in a 13-page memorandum from the Office of Legal Counsel that the Wire Act only applies to sports gambling. In response, casino magnate Sheldon Adelson, Sen. Lindsay Graham (R-S.C.), and Rep. Jason Chaffetz (R-Utah) have wrongly accused the Obama administration of re-writing the law, and they seek to pass a new law extending federal regulatory reach.

As Minton notes, before Members of Congress trample on the Bill of Rights, they should at least have a basic understanding of the history of the issue at hand.  Thanks to the Minton report, they now do. The last thing Congress needs to do is to trample on the Tenth Amendment to protect the profits of a Las Vegas billionaire.