It is pretty damn good to be a Republican right now. The GOP controls both the House and the Senate, it owns more than half of the gubernatorial seats in the nation, Obama is close to a zero percent approval rating, and 9/11 truther Pete Carroll kept Marshawn Lynch from being the Super Bowl MVP.
Seriously, could 2015 be any better for the old elephants?
Well, maybe if they eliminated one of the greatest evils plaguing our great nation. No, not gay marriage or abortion. We're talking about Internet gambling, particularly that sinful game of poker.
Yes, this is what our elected officials are wasting time on. Not ISIS, the economy, or student loan reform. Nope, now that they control the legislative branch the Republican party is taking aim at Internet poker.
Representative Jason Chaffetz (R-Utah) reintroduced a bill from the summer this past week to impose a federal ban on all forms of online wagering. Forget the irony that one of the most conservative Congressmen wants to impose the big bad federal government's will on states such as New Jersey, Delaware, and Nevada, who have already legalized online gaming. Instead, consider the consequences — no poker, no sports betting, and potentially no fantasy sports.
Rep. Chaffetz's bill, known as the Restoration of the Wire Act (RAWA) would roll back a 2011 Department of Justice memo that held that the Wire Act of 1961, the law that prohibits transmitting wagers over wires (phones, fax, Internet, etc), applies only to sports and not to other forms of gambling.
That 2011 Justice Department decision opened the doors for states to permit online gambling in addition to horse racing, fantasy sports and other games. Eric Holder's decision was a momentous shift in the federal government's interpretation of the Wire Act and the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).
Yet despite the fact that three states already successfully and safely accept online wagers, and at least ten other states are considering following suit, Rep. Chaffetz has found support for his bill. Rep. Tulsi Gabbard, D-Hawaii, the only other state alongside Utah with no legal gaming, c0-sponsored the bill. Six Republican House members signed on as original co-sponsors – Lamar Smith of Texas, Trent Franks of Arizona, Steve King of Iowa, Charles Dent of Pennsylvania, George Holding of North Carolina and Randy Forbes of Virginia. Sen. Lindsey Graham, (R-South Carolina) will likely introduce a similar bill in the Senate within the next few months too.
If RAWA passes, Internet poker and sports betting are headed for the mortuary. For now, though, fantasy sports would survive due to a carve out in the UIGEA.
The UIGEA, which became law in 2006, "prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law."
But the UIGEA exempted fantasy sports from its reach, and fortunately for FanDuel and DraftKings, RAWA does not mention the UIGEA. It only focuses on the Wire Act (Section 1081 of Title 18 of the US Code). Since fantasy sports have a carveout in the current law, it does not fall under the purview of RAWA, unless amendments are made to specifically include, or amend UIGEA.
As a bit of history, fantasy sports only achieved this exemption because fantasy sports, like horse wagering, are considered games of skill.
The three primary elements of gambling are prize, consideration, and chance. In America, if skill predominates chance, then it is not gambling, and thus not subject to anti-gambling laws.
The UIGEA specifically states a game is legal if it "has an outcome that reflects the relative knowledge of the participants, or their skill at physical reaction or physical manipulation (but not chance), and, in the case of a fantasy or simulation sports game, has an outcome that is determined predominantly by accumulated statistical results of sporting events."
Most states, for no good reason, consider poker a game of chance, rather than skill. Clearly, those lawmakers never actually played poker. But if fantasy sports are considered games of skill, then so should poker and sports betting. I mean, if fantasy sports are truly about skill, then wouldn't we all win our league titles?
Yet in an era where casinos are popping up faster than Starbucks, it certainly seems odd that Republicans are so hell bent on killing off the online gaming industry when it can generate tax revenue to help cash-strapped states. So why is the bullseye on Internet gaming?
The answer is actually money — casino money. Sheldon Adelson, the billionaire casino magnate responsible for the Venetian and Sands Macao, hates online gaming. Adelson, who donated $90 million to Republican candidates in 2014 alone, has openly admitted that he would be willing "to spend whatever it takes" to halt the spread of gambling over the Internet.
Adelson might be a polarizing figure, but if he wants Internet poker gone, then it will take every poker lobbyist possible to mount a successful counter-attack. More importantly, if Adelson ever shifts his focus on daily fantasy sites, then millions of new fantasy players will have to find something else to do on Sundays rather than monitor statistics all day.
RAWA is a dangerous start to the federal government undoing the significant progress several states have made in the arena of online gaming. Do not think for a second that RAWA only targets online casino games such as poker. If it passes, it is only a matter of time before fantasy sports become a thing of the past.
Steven Silver, Esq. is the founder of TheLegalBlitz.com. He is a former sports reporter for the Las Vegas Sun and is now a lawyer in the Philadelphia office of McBreen & Kopko. He is licensed to practice law in Pennsylvania and New Jersey. You can reach him at email@example.com or on Twitter@thelegalblitz.
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