A Blog About Online Gaming and Entertainment Regulations
Another Bill to Expand the Wire Act: Bad Law Clothed in a Lie
It is ironic that recent proposed legislation that would expand the scope of the federal Wire Act comes from a U.S. senator in the South, where “states’ rights” has always been a rallying cry.
This past week’s focus on the presence of the Confederate battle flag on the grounds of the South Carolina capitol (and elsewhere) brought back to the fore the specter of “states’ rights” – the seemingly high-minded excuse used by the antebellum Southern states to enslave and oppress an entire race of people, and used in the postbellum South to deprive those same human beings of their inalienable civil rights under the Constitution. Each state, advocates said, had the right to pass laws that reflected the will of its own population without the interference of a federal government whose broad reach threatened the shadow of tyranny.
Apparently that argument only applies when states are seeking to oppress minorities.
This week, presidential candidate and Senator Lindsey Graham introduced S.1688 – a bill with a name and policy pitch that rely on a false history of U.S. gaming legislation. The bill would expand the Wire Act’s scope, which currently includes only sports betting, to include all forms of gaming. In doing so, the bill would also reverse those portions of the Unlawful Internet Gambling Enforcement Act of 2006 that permitted states to license and regulate online poker and other limited forms of online gaming on an intra-state basis. Thus, with this bill, Senator Graham and other legislators seek to deprive states of the ability to establish regulated gaming and compact with other like-minded states. The bill is identical to legislation introduced by House Oversight Committee chairman Jason Chaffetz in February of this year, and to a bill introduced in the Senate a year ago.
The bill’s title – the “Restoration of America’s Wire Act” – is simply part of a lie that the Wire Act was ever intended to apply to gaming other than sports betting. For years prior to 2011, the U.S. Justice Department made that assertion, which ran smack into legislative history for the Wire Act that made clear that was not true. In December 2011, after several courts rejected that argument, the Justice Department finally abandoned that position – not because anything changed in the law, but because the Department took a more educated and enlightened look at the statute and recognized that its previous position was simply unsupportable. The bill’s expansion of the Wire Act to include other forms of gaming is not a “restoration” in any sense of that word; it is a vast expansion of the federal government’s control over gaming in the United States.
If the only problem with the bill was its title, that would not be so bad. But this bill is yet another needless expansion of federal criminal law to matters for which federal law enforcement already has ample tools. In 2011, the United States Attorney for the Southern District of New York charged a number of individuals with crimes relating to the provision of online poker in the United States, and froze billions of dollars of assets, without relying on the Wire Act. There has been plenty of discussion about this bill; no one has pointed out any gaming activity that the government was unable to prosecute or control because the Wire Act has been restricted to the scope intended by the Congress that passed it.
On the other hand, the needless expansion of the Wire Act has the potential to snuff out the benefits of online gaming for states that are beginning to license and regulate it within their borders. For many of these states, the key to success – particularly for online poker, and particularly in states with smaller populations – will be their ability to compact with other states to combine their player pools. One such compact exists now between Nevada and Delaware, and others are likely to follow. But Senator Graham’s misguided legislation would prevent states from compacting in that manner.
Following the tragic shooting at the Emanuel AME Church in Charleston, Senator Graham shrewdly recognized that momentum was not on the side of defending the Confederate battle flag, and reversed position to join those who called for it to be removed from the South Carolina state capitol grounds. It is unfortunate that, in the case of the Wire Act, Senator Graham has thus far chosen to ignore both popular sentiment and what makes sensible legislation.
Some groups, such as the Poker Players Alliance, have accused Senator Graham of introducing this bill because he seeks support from certain rich donors for his presidential aspirations. This may or may not be true. But it is crystal clear that the bill would make bad law. Introduced this past Wednesday, it has been referred to the Senate Committee on the Judiciary. We can only hope it meets a quiet demise there.