Could Online Gambling Moratorium Pick Up Steam? RAWA Alternative Back On Table

Posted on September 24, 2015

After sitting on the sidelines for most of the 2014 legislative session, the Sheldon Adelson-inspired Restoration of America’s Wire Act (RAWA) got a late push during the lame-duck session. In the end, the effort fell short, but for many online gaming supporters it did highlight the need for vigilance.

If recent reports prove correct, it appears this vigilance will be needed in the coming months.

In addition to rumors that more RAWA-related hearings are being discussed, a recent report by Gambling Compliance (paywall) indicates there may be another late push by pro-RAWA forces in Congress to pass what would amount to an online gambling moratorium, after their efforts to rally support for RAWA have come up short.

If this is indeed the case, iGaming advocates will once again be called on to defend the wall.

RAWA-lite

The moratorium isn’t a new development. It was first floated back in July, following Lindsey Graham’s reintroduction of a slightly watered down version of RAWA in the U.S. Senate. When Graham’s bill was all but ignored, it seems to have become clear to RAWA supporters that a federal online gambling ban was not going to happen.

RAWA’s fragility was first exposed at the absurd RAWA hearing hosted by Rep. Jason Chaffetz (R-Utah) in March. Despite a stacked lineup, the anti-gambling witnesses were unable to make a compelling case for a federal ban, and soon after it became evident to most observers that RAWA wasn’t going to be able to overcome its own shortcomings, not to mention the powerful opposition (from libertarian and small government groups to state lotteries) that had lined up against it.

According to an anonymous gambling lobbyist who spoke with Gambling Compliance, “Adelson failed in his attempt to get a ban passed. The study and moratorium is Plan B.”

The proposed moratorium is being sold as an olive branch from the Adelson contingent, as it would allow Nevada, Delaware, and New Jersey to continue to offer online gaming, while putting a hold on all further online gaming expansion at the state level for up to two years, ostensibly to allow Congress to study the matter. Of course, these studies have already been conducted (here, here, here, here, and here), so the moratorium is seen as nothing more than a stalling tactic; a way to ban online gambling for a period of time because it looks poised to spread to more states in the coming years.

Essentially, the moratorium is less an olive branch and more a desperate Hail Mary pass.

Can a moratorium gain traction?

As noted above, the biggest problem the moratorium faces is the studies it wants to conduct have already been done. And there are real-world experiments occurring as we speak in New Jersey, Delaware, and Nevada. It should be relatively simple to paint the proposed study as little more than government waste.

On top of that, the proposed moratorium has to overcome the same barriers RAWA faced:

  • It’s still considered federal overreach. The moratorium is simply a watered-down version of RAWA that serves no reasonable purpose. The main objection to RAWA is the bill’s overreach and meddling in states’ affairs. A moratorium placed on states by the federal government does precisely the same thing as a ban.
  • There is little public support calling for Congress to take action on online gambling. Without a concerted push from their constituencies, online gambling is unlikely to suddenly appear on lawmakers’ radars.
  • The moratorium is unlikely to turn opponents into allies. The opposition groups consider a moratorium to be no different than an outright ban. Lawmakers in states exploring online gaming and/or online lottery expansion are not going to suddenly switch sides.
  • Sheldon Adelson is still seen as the architect of the bill and the driving force behind it. For Democrats this amounts to sleeping with the enemy, while Republicans must deal with the inevitable catcalls of crony capitalism.
  • Every bit of evidence we have indicates that legal, regulated online gambling doesn’t produce any of the negative outcomes that Sheldon Adelson and his anti-online gambling surrogates claim it does. As Michael Pollock of Spectrum Gaming Group said at a recent hearing in New York, “It’s not guesswork or wishful thinking,” we have the evidence and data from the current operators in the legal markets.

All things considered, the moratorium is unlikely to attract anything approaching widespread support. My advice is to be vigilant, but don’t lose much sleep over it.

Photo by Christopher Sessums used under license CC BY-SA 2.0

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Steve Ruddock

Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus is the developing legal and legislative picture for regulated US online poker and gambling.

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