Nevada senator plans a new federal ban on internet gambling

Sheldon Adelson’s CSIG drive against online gambling will be pleased with the news that a new federal banning bill covering all but online poker is about to be introduced to Congress.

The news broke Thursday in the Las Vegas Review Journal, which reported that Nevada Republican Senator Dean Heller is to present the bill – apparently drafted in consultation with veteran Democratic Party stalwart Senator Harry Reid – in March this year.

Heller used the opportunity to talk up Adelson’s CSIG, claiming it made good points – hardly surprising, given Adelson’s generosity in political donations to Republican coffers in the past. He hinted that his bill would restore the Wire Act (a key Adelson objective) and ban all forms of online gambling with the exception of online poker, which he said demanded an element of skill.

Keeping online poker legal should appease his Nevada constituency, where internet poker enterprises are now legitimately in operation, but is unlikely to please states like New Jersey and Delaware, which have legalised online gambling in the wider sense.

Other “exceptions” will probably have to be negotiated, unless Heller wants to take on the powerful fantasy sports and horse racing industries, both of which enjoyed carve-outs in previous legislation, along with state lotteries.

Adelson’s proposed Internet Gambling Control Act already contains exemptions for fantasy sports and advance deposit wagering on horse races in its draft form as currently circulated, and that could influence Heller’s content, again bearing in mind Adelson’s monetary influence in politics.

But Adelson seeks to ban online poker and most other forms of online gambling.

Heller will be remembered as the man Reid accused of procrastinating in bringing Republicans on board, leading to the failure in 2012 of one of his previous attempts at a federal solution.

He has not yet commented on Heller’s latest initiative, but his last anti-online gambling collaboration with Sen. Jon Kyl also included similar carve-outs. And the more carve-outs there are, the more diverse the opposition is likely to be.

Observers are already noting that in an election year, and in the face of strong opposition, Heller’s initiative is unlikely to gain much political traction in either the House or the Senate, where legalisation bills by Rep. Joe Barton (online poker only) and Rep. Peter King (online gambling in the wider sense) still languish (see previous reports).

It raises very sensitive questions on states’ rights in an environment where various forms of online gambling are either already legalised or are being actively considered in a number of states to increase tax revenues, and major companies have already made substantial investments.

Additionally, as the Online Poker Report information site notes in an article this week, the original 1961 Wire Act appears to apply only to interstate (federal) transactions….not those conducted within individual states, which fall under states’ rights.

This element was taken into consideration when the Department of Justice reversed itself on its application of the Wire Act, bringing it in line with the original intent of the act and with a Fifth Circuit Court of Appeals decision in 2002 that the Act covered only sports betting.

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