Nevada AG Supports RAWA and We Don’t Wonder Why

In October, Missouri Attorney General Chris Koster and South Carolina Attorney General Alan Wilson wrote a letter to their fellow Attorneys General around the United States, seeking their backing for a follow-up letter to U.S. House and Senate Judiciary Committee leadership in which they will encourage the federal legislators to support the Restoration of America’s Wire Act (RAWA). RAWA, the spawn of Las Vegas Sands CEO Sheldon Adelson, would make online poker and most other forms of online gambling illegal in the United States, wiping out current legal, regulated online gambling industries in Nevada, Delaware, and New Jersey.

We could naturally expect some Bible Belt Attorneys General as well as some other Republican AG’s hoping to suckle at the teat of Adelson’s coin purse to sign on to the petition, but the Nevada Attorney General? Sure enough, Nevada AG Adam Laxalt told Jon Ralston on his show, “Ralston Live,” this week, “I intend to sign onto the letter. It’s circulating now.”

When Laxalt told Ralston this, Ralston naturally pushed back, reminding him, “That would seem to me the reverse of what Adam Laxalt usually says. That’s letting the federal government intrude on something that’s a states’ rights issue. We have an internet poker law here, this would directly go against that. Did you lose your way here, federal versus state?”

Laxalt’s response, parroting the usual RAWA-supporter rhetoric:

There’s a couple giant exceptions to this, alright? One is Congress spoke on this issue and had an existing Wire Act, ok? And then Attorney General Holder issued an opinion a few days before Christmas some years ago and changed that landscape. He changed that landscape without gaming companies, without law enforcement, without all the parties that should’ve been involved to make sure that we can keep consumers safe and all this can be done properly. So, I think obviously in this case we’re looking to return it back to what the status quo was, that Congress passed, and, you know, the other thing is obviously gaming is a different animal. You know, you have, you need to know where the sources of money are coming from and you need to make sure you can police this area.

Ralston pointed out that Sheldon Adelson contributed financially to Laxalt’s bid for Attorney General, but Laxalt said he has not spoken with Adelson about RAWA. He added that Steve Wynn and Nevada Senators Harry Reid and Dean Heller also support RAWA, saying, “People have been looking at this issue and I think that there’s consensus – obviously, with some exceptions – that we should return back to the status quo and then we put it back to Congress so these guys can figure it out.”

Nevada AG Adam Laxalt
Image credit: Lewis Roca Rothgerber Law

Apparently those four people are NOT the exceptions, but the rule?

In a vacuum, some of Laxalt’s explanation could seem slightly reasonable. After all, why wouldn’t it be a good idea to get input from different people and go through the proper Congressional channels to change a law? It would be reasonable to think that if it wasn’t for the fact that no law was changed. The Wire Act was simply clarified correctly by Assistant Attorney General Virginia Seitz, not Holder, of the Department of Justice’s Office of Legal Counsel. She wrote the legal opinion in late 2011 in response to the New York Lottery’s and Illinois Governor’s Office’s inquiry as to whether or not their online lottery plans would be legal. They asked about it in 2009 and finally, two years later, the OLC said that, sure enough, just as the Wire Act reads, only internet sports betting is illegal.

But this isn’t just a case of Adam Laxalt being mistaken. As mentioned, Sheldon Adelson contributed to his campaign for Attorney General, so that would be enough to raise eyebrows as it is. But that’s not all. In an article about the Adelson-funded Coalition to Stop Internet Gambling (CSIG) and its ties to the Nevada lobbying firm j3 Strategies, Flushdraw’s Haley Hintze pointed out another not-so-subtle connection between Laxalt and Adelson:

If the client list for j3 Strategies doesn’t totally reek of pay-to-play politics and crony capitalism, you can bet the firm itself is constructed for exactly that purpose.  Uithoven himself is the Reno guy, VP and junior partner Hamilton is the Vegas guy, and the only other j3 Strategies lobbyist mentioned on the company’s website is Therese “Tessa” Laxalt.  Oh, that Tessa Laxalt, sister to Adam Laxalt, the new Nevada Attorney General who was elected in large part due to hefty campaign contributions from — you guessed it — Sheldon Adelson.  That’s called a direct chute chock full of political grease, right into the highest reaches of Nevada politics.

There may be some Attorneys General who sign the petition who are just mistaken in their thinking (unlikely), but Adam Laxalt is not one of them.

Nevada Governor Brian Sandoval is none too happy with Laxalt’s stance. He responded, in part:

….as a former Attorney General, Gaming Commission Chairman and someone who worked with the industry and the Legislature on Nevada’s online poker legislation, I am very concerned that anyone representing the state’s legal interests would speak out against current state law in our leading industry. 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.

Nevada Gaming Control Board Commissioner A.G. Burnett also dropped knowledge on Laxalt:

I disagree on his position regarding RAWA.  States should be left to regulate gaming as they choose, and the regulatory agreement between Nevada and Delaware has been a success.  Without a carve-out for state-regulated online poker, the activity simply couldn’t exist in a legal, regulated format.  I am concerned that would mean that offshore operators would still be able to offer illegal, unregulated online poker, while licensed and suitable entities are banned from doing so.  To my knowledge, RAWA contains no nationwide geo-fencing from offshore gaming operators.  Also, I am concerned about the chaos that will erupt if RAWA exempts certain forms of fantasy sports, particularly the unregulated industry of daily fantasy sports.  Such a carve-out might allow DFS, which is clearly a form of gaming, to operate that gaming without any regulatory oversight, including consumer protection, audits, law enforcement mechanisms and suitability for licensing standards.

Happy Thanksgiving!