Ten Republican attorneys general recently sent a letter to Vice President-elect Mike Pence and the Trump transition team asking for a reinterpretation of the Wire Act to include a federal ban on all online gambling.
The signers includes Nevada AG Adam Paul Laxalt, whose state offers intrastate online poker that would be prohibited by a federal ban. A review of campaign finance records by Watchdog.org shows that Las Vegas casino magnate Sheldon Adelson, who is pushing hard for the online gambling ban, heavily contributed to Laxalt’s election to the office in 2014.
Records collected by the National Institute on Money in State Politics show that despite campaign contribution limits of $5,000 per individual per election (allowing $10,000 to be given between the primary and general elections), Adelson was able to funnel tens of thousands to Laxalt’s campaign.
Adelson and his wife, Miriam Ochshorn Adelson, each gave $10,000. Venetian Casino Resort, owned by Adelson, gave $10,000, as did Las Vegas Sands, the corporation of which he is founder, chairman and chief executive officer. Sister business Sands Expo & Convention Center contributed another $10,000. His daughter, Shelley Faye Adelson, chipped in $5,000.
Adelson gave $20 million on Sept. 20 to the pro-GOP super PAC Senate Leadership Fund. The next day, three Republican senators introduced a measure that would ban financial institutions from processing transactions related to online gambling. Similar House legislation called Restore America’s Wire Act (RAWA) failed to gain traction last year.
Some critics fear the online gambling ban could be attached to an unrelated must-pass bill during the lame-duck session of Congress.
The letter from the AGs brings up a number of standard scare-tactic talking points about internet gambling — underage gambling, money laundering funding terrorist activity — without offering much proof.
“In the dark of night on Christmas 2011,” the letter dramatically reads, “the Obama administration overruled 50 years of practice and precedent when a Department of Justice Office of Legal Counsel opinion claimed the Wire Act applied only to sports betting, and not to other types of online gambling.”
Setting aside the fact the internet did not exist in 1961, making “50 years of practice and precedent” impossible, it was the cloudiness of the Wire Act that allowed online gambling — particularly poker — to flourish in the early years of the 21st century.
It still remains unclear if the Wire Act applies to most online gambling of today. The act specifically references a bettor using “a wire communication facility” to make “bets or wagers on any sporting event or contest.” The U.S. Court of Appeals for the Fifth Circuit has also ruled the Wire Act applied only to sports bets.
Since the Obama administration’s ruling on the Wire Act, Delaware, New Jersey and Nevada legalized various forms of online gambling while a few more states sell lottery tickets online.
The letter is cosigned by Jeff Landry (Louisiana), Bill Schuette (Michigan), Douglas Peterson (Nebraska), Wayne Stenehjem (North Dakota), Scott Pruitt (Oklahoma, who has been tapped as EPA head by President-elect Donald Trump), Alan Wilson (South Carolina), Marty Jackley (South Dakota), Ken Paxton (Texas) and Sean Reyes (Utah.)
Rich Muny, vice president of player relations for the Poker Players Alliance, said the actions the AGs are asking for is contrary to Trump’s pledge to eliminate much of the D.C. corruption.
“President-elect Trump and VP-elect Pence said they would ‘drain the swamp,’ yet one of the first things we see is this push to reward mega-donor Sheldon Adelson with crony capitalism legislation that bans his online competition,” he said.
Rep. Dina Titus, D-Nevada, sent her own letter to Pence on Tuesday, arguing the AGs’ letter contained “several inaccuracies and unfair allegations.” She noted that in Nevada, where “there are effective controls in place to verify age and location, there has not been a single reported incident of minors playing poker online.”
Titus said the letter didn’t make the distinction between regulated online gambling in the states and illegal offshore websites. “In states where online gaming is legal and regulated, there are extensive consumer protections in place that are enforced by state law enforcement authorities,” she wrote.
Nevada Gov. Brian Sandoval said in a statement that he disagreed with Laxalt’s move.
“I am very concerned that anyone representing the state’s legal interests would speak out against current state law in our leading industry,” Sandoval said. “At its core, this is a state’s rights issue and I disagree with the Attorney General that a federal government one-size-fits-all solution is in the best interest of Nevada.”
Ballotpedia notes that on his 2014 election campaign website, Laxalt mentioned protecting person freedoms as an important issue.
“That’s why as attorney general I will defend our constitutional rights and personal liberties, and fight against Washington’s overreach,” Laxalt’s campaign site said.
The Tenth Amendment reserves for states any powers not specifically delegated to the federal government by the U.S. Constitution. States rights’ advocates say the authority to legalize and regulate online gambling falls in that purview.
David Williams, president of the Taxpayer Protection Alliance, called the letter “disappointing,” especially since it comes from Republicans “who should be embracing, not rejecting, federalism.”
“Allowing the federal government to take away states’ ability to regulate online gaming could lead to a slippery slope of more Washington regulations,” Williams told Watchdog. “That is the exact opposite precedent that the AGs should want to establish.”
Williams joined with several other groups, including the Institute for Liberty, Center for Freedom and Prosperity and the Competitive Enterprise Institute, to send a letter this week to Rep. John Culberson, chairman of the House Appropriations Subcommittee on Commerce, Justice and Science. The coalition appealed to Culberson not to allow unrelated bills to be attached to year-end spending legislation, specifically mentioning the RAWA-like online gambling ban.
“The consequence of RAWA legislation being buried in a spending bill sets a dangerous precedent for any party to use such bills in the future to circumvent the Constitution’s protections in a variety of areas, including the 2nd Amendment, which increases the possibility of further federal intervention in firearm and ammunition sales,” the coalition wrote.