The Curious ‘Internet Gambling Control Act’ Proposal

congressLas Vegas Sands Corporation CEO Sheldon Adelson’s announced war on internet gambling and online is a headline-dominating topic this month, worthy of multiple stories here at the ‘Draw.  Among those stories: The leaking of a purported bill draft of something called the “Internet Gambling Control Act,” a very preliminary concept for a federal bill, designed to unwrite modern history, that’s supposedly been designed by the Adelson-funded Coalition to Stop Internet Gambling.

This one is very curious, for several reasons.  The genesis for this preliminary, unsponsored proposal is a single post by blogger Marco Valerio, who’s worked for a couple of poker sites in the past.  Valerio has published the raw text of this bill, which was supposed to “fix” the 1961 Wire Act, that law upon which virtually all other United States federal laws concerning gambling crimes have been built.

Much of the bill’s text is blank and, overall, it appears to have been readied for a preliminary introduction in 2013, but that never happened; nothing like this has ever been introduced in the US House of Representatives.  Valerio attributed the bill to the Adelson-funded minions of the new Coalition to Stop Internet Gambling, but there’s nothing on that group’s site to suggest a connection to this bill — which is odd, given that there’s plenty of other news on that front, as we’ll delve into in another story this week.

It’s hard to say for sure that this proposal is legit.  Contrast this to the recent Jay Newnum / WhoJedi theft story from Connecticut’s Foxwoods casino, in which pokerfuse claimed to have obtained court documents but did not publish them.  In that story, there were other lines of evidence, such as the public Facebook posts by the Foxwoods dealers union boss.

Here, with this Wire Act “fix”, there’s been no secondary confirmation.  Nothing.  And yet that hasn’t stopped a whole slough of poker outlets rushing out with breathless stories on the topic, including one of the weaker Joss Wood stories in recent memory over at the fuse.  Wood’s assumptive piece includes this closing call to arms: “2014 may well see a battle royal commence, with online poker providing the critical battleground.”

Oh, come on now.  This bill doesn’t even have a sponsor, and the odds of it moving forward in an election year without the help of another Bill Frist-style “Vampire Congress” to jam it through unread are nil.  The houses of Congress are split right now, and there’s no right-wing rubber-stamping Prez to sign off on such a matter.  Even without other problems with the proposal itself, this bill ain’t goin’ anywhere.

A little bit of history helps illustrate the issue.

In late 2011, A Justice Department opinion issued by then-US Attorney General Eric Holder clarified that the 1961 Wire Act applied only to sportsbetting, and not to other forms of gambling.  It also added a degree of confirmation to arguments that internet-based forms of information transfer were likewise not covered by the old Wire Act, because that law specified “telecommunications” (meaning land-based telephones and landlines), and the law had never been updated.

Instead of updating the Wire Act and continuing to allow the DOJ and authorities to extend the reach of the Wire Act into uncharted areas, Holder’s opinion followed a more traditional legal practice — limiting the scope of the scope of the Wire Act to what it actually said.  That’s how laws are supposed to work in the US and other Western legal societies, but that’s often not the case.  The Holder opinion was vital, however; by applying a traditional and literal interpretation of the old law, state lotteries could then market their products online without running afoul of federal prohibitions.

Online poker and other forms of online gambling, from fantasy sports to casino games, also received a green light, at least in terms of no longer being de facto restricted by an outdated, overreaching Wire Act interpretation.

Yes, that’s what allowed Nevada and Delaware and New Jersey to move forward with their online-gambling systems, but it was also necessary for a clarification to be issued to allow states to offer lottery sales online, because there’s never been am iota of skill involved in guessing which numbered balls will be pulled out of a drum.  Those states include Illinois, New York and others, and they aren’t going to want to see that reexamination of the Wire Act reversed.

There is no carveout in this proposal to fix the Wire Act to allow for lotteries and other non-skill games of chance; the only carveouts I’ve noticed protect other old-time, sacred gambling cows — the horseracing industry (already exempted under the Wire Act in the 1978 Horseracing Act), tribal gaming, and the major pro sports leagues in the form of a carveout for fantasy sports.

It’s also worth noting that the stated purpose of the draft proposal is a twisted rewriting of history:

To restore long-standing United States policy that the Wire Act prohibits Internet gambling to give Congress and the public time to fully examine the issues surrounding Internet gambling, including the potential for money laundering fraud, terrorism, cyber-crimes and participation by minors; and for other purposes.

Except the Wire Act never mentioned the Internet, since it came from an era when the Intertubes weren’t even a glint in Al Gore’s eye.  And all that money-laundering, terrorism and cyber-crimes stuff, that’s just posturing.

This proposal is so poor in quality and likely chances of success that it’s even possible that it was leaked to Valerio on purpose, thereby to drum up waves of protest and indignation and generate more publicity for the issue itself and turn it into an anti-gambling cause celebre.   Still, that would require a realistic take on the topic, and a grasp on reality isn’t the strong suit for some of the Coalition to Stop Internet Gambling’s most ardent backers, as we’ll look at next time out.



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