Sheldon Adelson

Graham, Chaffetz Introduce Federal Online Gambling Ban Measures

United States Senator Lindsey Graham (R-South Carolina) and U.S. Representative Jason Chaffetz (R-Utah), separately introduced yesterday similar draft measures designed to ban virtual all forms of all Internet gambling within the United States.

The Graham proposal, which was circulated independently last week and was first made public by Washington political beat reporter Steve Tetreaut, subsequently appeared in several outlets.  FlushDraw’s cleaned version of the Graham bill appears in this post.  A similar cleaned and easy-to-read version of the new Chaffetz bill appears here, after again being released to the public by multiple sources.


The two new anti-gambling measures introduced on Wednesday should rightly be called the Adelson-Graham and Adelson-Chaffetz measures.

While a handful of cosmetic differences between the Graham and Chaffetz bills exist, both are virtually identical in real meaning.  The new Chaffetz bill, for example, carries the short title, “Restoration of America’s Wire Act,” while Graham’s version, with its different paint job, is called the “Internet Gambling Control Act”.

Both bills and their respective sponsors have been tied directly to the deep-funding pockets of billionaire brick-and-mortar casino mogul Sheldon Adelson.  Adelson, the CEO of Las Vegas Sands Corporation, has openly funneled tens of millions of dollars to politicians in exchange for support for his causes, which now include an attempt to ban online gambling and thereby increase the market dominance of Adelson’s LVSands physical casinos, which include the Venetian and Palazzo in Las Vegas.

Graham, for instance, received what was likely hundred of thousands of dollars via a lavish fundraiser hosted at the Palazzo four months ago, including $15,000 in personal donations from Adelson and his wife, Miriam.

Adelson has already been definitive tied to the Graham measure in the form of an Adelson lobbyist, Darryl Nirenberg, having authored the bare-bones Graham proposal.  Since the Graham and Chaffetz bills share the same language in several spots, this is likely an attempt at the legislative version of automotive “badge engineering”, the same way that for many years, the Dodge Omni and the Plymouth Horizon were virtually the same car.  (For a more modern example, look at the Nissan Terrano and Renault Duster SUVs.)

This approach allows the bills’ backers to attempt to “taste-test” the proposal’s language while ultimately not compromising its intent — to strengthen and reinforce the United States 1961 Wire Act in two ways — by adding language tying “communications” specifically to the Internet, and by removing original Wire Act references to sports betting and sporting events.

Graham and Chaffetz also hail from two of the most conservative anti-gambling US states, in Utah and South Carolina, respectively.  This allows Graham and Chaffetz to play to their respective states’ rather outsized conservative forces — in other words, appealing to their political bases — while ignoring mounting opinion polls that show the American public continuing to be slightly in favor overall of federal regulation and authorization of Internet gambling.

South Carolina and Utah are part of a small minority of US states with no land-based casinos.  South Carolina has very limited gambling opportunities, and the closest thing to a casino opportunity there is boarding a casino cruise in a coastal tourism destination such as Myrtle Beach, then sailing out into the Atlantic Ocean and into international waters to play on a floating casino.  Utah is one of only two states (along with Hawaii) where no gambling is allowed, and Utah also has enacted a law preemptively banning online gambling in case of federal enactment of any sort of pro-gaming regulatory measure.

Besides Graham and Chaffetz, the twin bills’ primary sponsors, a few other anti-gambling politicians have also signed on as co-sponsors.  In the Senate, that includes noted nanny-state Senator Dianne Feinstein (D-California), while in the House, in support of Chaffetz’s proposal, that includes Rep. Tulsi Gabbard, a Democrat from — you guessed it — Hawaii.

As expected, the twin bills both secured the horseracing carveouts first granted via the 1978 Interstate Racing Act.  Continuing these carveouts guarantees the continuing support of elected officials such as Senate Minority Leader Mitch McConnell (R-Kentucky) and US. Rep. Bob Goodlatte (R-Virginia), who have been active foes of any gambling forms except for the horseracing industries so important to their home states’ economies and self-image.

While these bills are likely to garner a noticeable amouty of anti-gambling support, their ability to pass is a far different story.  Apart from Adelson’s big-money spending, the bills run counter to measures in several states that have taken various forms of gambling to the Internet.  Poker readers know about Nevada, Delaware, and New Jersey, but online lottery sales would also be blocked, counter to legalization of that gambling channel in Illinois and New York.

In fact, as noted in the Chaffetz version, the bill would annul all existing state-level moves in that direction, which isn’t only insulting; it may be unconstitutional as well, since gambling is historically and legally a states’ rights issue.

In addition, since the bill is a direct slap at the late 2011 legal re-reading of the Wire Act by US Attorney General Eric Holder, there’s a high degree of doubt that even if such a bill were to pass, it would then be signed into law by US President Barack Obama.  Obama, who will remain in office through 2016, has been neutral on internet gaming matters but would seem to be unlikely to override his own chosen Attorney General, nor to nullify the effort of his home state of Illinois in legalizing online lottery-ticket sales.

For these and many other reasons, the bills are likely more bluster than reality.

FlushDraw will return in the near future with more of this developing story, including the immediate reactions from several gaming-industry outlets and pro-gaming politicians.  Come what may, the issue of online gambling will be receiving much more mainstream attention in the near future.

The Adelson-Chaffetz bill:

…………………………………………………………… (Original Signature of Member)

H. R. _____________

To restore long-standing United States policy that the Wire Act prohibits all forms of Internet gambling, and for other purposes.


Mr. CHAFFETZ (for himself and Ms. GABBARD) introduced the following bill; which was referred to the Committee on _________________.


To restore long-standing United States policy that the Wire Act prohibits all forms of Internet gambling, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,


This Act may be cited as the ‘‘Restoration of America’s Wire Act’’.


Section 1084 of title 18, United States Code, is amended—

(1) in subsection (a)—

     (A) by striking ‘‘bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest,’’ and inserting ‘‘any bet or wager, or information assisting in the placing of any bet or wager,’’;

     (B) by striking ‘‘result of bets or wagers’’and inserting ‘‘result of any bet or wager’’; and

     (C) by striking ‘‘placing of bets or wagers’’and inserting ‘‘placing of any bet or wager’’; and

(2) by striking subsection (e) and inserting the following:

     ‘‘(e) As used in this section—

     ‘‘(1) the term ‘bet or wager’ does not include any activities set forth in section 5362(1)(E) of title 31;

     “(2) the term ‘State’ means a State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or a commonwealth, territory, or possession of the United States;

     ‘‘(3) the term ‘uses a wire communication facility for the transmission in interstate or foreign commerce of any bet or wager’ includes any transmission over the Internet carried interstate or in foreign commerce, incidentally or otherwise; and

     ‘‘(4) the term ‘wire communication’ has the meaning given the term in section 3 of the Communications Act of 1934 (47 U.S.C. 153).’’.


Nothing in this Act, or the amendments made by this Act, shall be construed—

(1) to preempt any State law prohibiting gambling; or

(2) to alter, limit, or extend—

     (A) the relationship between the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et seq.) and other Federal laws in effect on the date of enactment of this Act;

     (B) the ability of a State licensed lottery retailer to make in-person, computer-generated retail lottery sales under applicable Federal and State laws in effect on the date of the enactment of this Act; or 

     (C) the relationship between Federal laws and State charitable gaming laws in effect on the date of the enactment of this Act.


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