UIGEA was attached to the Safe Port Act in 2006, because it did not have wide support. Graham and Feinstein want a broad interpretation of UIGEA, which is at odds with history.
John Pappas of the Poker Players Alliance responded to efforts by U.S. Senator Lindsey Graham (R-South Carolina) and U.S. Senator Dianne Feinstein (D-California) to push a new version of Restore America’s Wire Act (RAWA) on the U.S. Justice Department.
Graham and Feinstein recently sent a letter to Deputy Attorney General Rod Rosenstein, urging the Department of Justice to reverse a 2011 opinion on online gambling and the UIGEA. Under Eric Holder, the Justice Department determined that UIGEA covered online sports betting, but not online casinos or poker sites.
That decision opened the door for New Jersey, Nevada, Delaware, and Pennsylvania to legalize online gambling in their states. Graham and Feinstein claimed in their letter that the decision encroached on the rights of US states to ban online gambling, while endangering at-risk Americans. John Pappas, president of the Poker Players Alliance (PPA), disagreed with that assessment in an open letter.
John Pappas Challenges RAWA Letter
John Pappas posted his online response, stating, “If they were handing out awards for congressional letters, this one would win ‘Most Misleading’ in a landslide. Aside from the statement that Pennsylvania authorized online gaming and others are considering it, there is nary a fact contained within the letter’s five paragraphs.”
The senators cited a letter by the FBI which described how offshore online gambling sites might help organized crime or even terrorist networks. That might be true for unlicensed and unregulated gaming sites, because they do not undergo the vetting process by US authorities that they do in New Jersey, Nevada, Delaware, and Pennsylvania. Even then, most sites unregulated by US authorities are licensed by responsible gaming regulators like the UK Gambling Commission, Gibraltar Gaming Authority, or Malta Gaming Authority, so the FBI’s letter concerns the small number of rogue sites which remain outside the international mainstream.
“Thoughtfully Enacted” UIGEA Law
That is glossed over in the letter by Sen. Graham and Sen. Feinstein, who take it as a settled fact that all online gambling is equally nebulous — thus equally dangerous. They added another charge — that the 2011 DOJ opinion undermined decades of settled law.
The letter states, “The DOJ opinion had the practical effect of repealing legislation Congress carefully and thoughtfully enacted in 2006 to ban internet gambling.”
The charge is wrong on several levels. The Unlawful Internet Gambling Enforcement Act (UIGEA) failed to gain support from a majority of US federal lawmakers. After several failed attempts to pass the measure, Congress’s leaders added it to the Safe Port Act, knowing few senators and representatives were going to vote against a patriotic bill. Without proper deliberation, UIGEA was sneaked into another bill.
Bizarre Interpretation of 1961 Wire Act
The idea that UIGEA was a long-settled matter is also false. The UIGEA gave federal authorities the right to ban all online/mobile forms of gambling which were banned over telephone lines under the 1961 Wire Act. The Wire Act specifically notes that it bans sports gambling over the telephone lines. It makes no mention of a ban on casino gambling or poker, for a good reason: those types of gambling were never transmitted over the phone lines.
The 2011 DOJ opinion thus corrected a wild-eyed interpretation of the Wire Act which persisted for less than 5 years. Even if one argues that the Wire Act would have banned blackjack, roulette, and poker bets over the phone lines if legislators in 1961 knew that might be possible one day, one has to look at the original intent of the framers of the 1961 Wire Act. The law was designed to catch organized crime members, who ran rackets by taking sports bets over the interstate phone lines. The Wire Act was used to prosecute racketeers for illegal gambling, when they had trouble prosecuting them for their other mob activity.
If the point of the 1961 Wire Act was to undermine organized crime, and the UIGEA updates that effort for the Internet Age, then regulating online and mobile gambling is a much more effective — the only effective — way to achieve that goal. Banning the practice only drives it underground, which allows organized crime the opportunity it wants to get involved.
“The Realities of Regulated Online Gambling”
John Pappas criticized Graham and Feinstein for their fantastical approach to Internet gambling, which he describes as unrealistic. Pappas wrote, “Congress has given express authority to states to regulate iGaming, a detail that Senators Graham and Feinstein repeatedly ignore. Moreover, they continue to misrepresent an almost decade-old FBI letter that does not address the realities of regulated online gambling.”
Senators Graham and Feinstein told the DOJ that its 2011 opinion had changed the face of online and mobile gambling. In their letter, the senators told Rod Rosenstein, “We warned that the DOJ opinion ‘could usher in the most fundamental change in gambling in our lifetimes’ by turning every smart phone, tablet, and personal computer in our country into a casino available 24 hours a day, 7 days a week.”
That opinion entirely ignores the fact that Americans can engage in unregulated gambling with offshore online casinos and poker sites. From 2007 to 2011, the Department of Justice maintained a 100% ban on online casinos and card rooms. During that period, US players in every state continued to sign up for player accounts at unregulated online gambling sites. In the 46 US states which do not have licensed and regulated online gambling, players continue to use smartphones and desktop computers to gamble online every single day. No effort is made to stop that gambling, because US law enforcement knows it’s an impossible task. No one wants to prosecute Americans for gambling in the privacy of their own home.
How Regulated Online Gambling Works
In New Jersey, Nevada, Delaware, and (soon-to-be) Pennsylvania, Americans have the option to play at gambling sites licensed and regulated by their own states. These Americans play with responsible gambling measures, self-exclusion lists, consumer protection, age verification protocols, and GPS-enforced geolocation bans on out-of-state gaming. Because of GPS technology, sites licensed by those states bar anyone from outside those regions from playing.
In short, regulated online gambling undermines unlicensed gaming in those same states, thus protecting US citizens. In the 46 states which use the kind of system Sen. Graham and Sen. Feinstein want for everyone, Americans have no such protections. The very dangers Graham and Feinstein warn about are the dangers they are promoting. John Pappas added in his criticism of the senators, “I suppose it’s easier to conflate reality with their own bias to continue making the same point, than [it is] actually [to] own up to the fact that regulated iGaming is responsible public policy.”
Lindsey Graham for years claims New Jersey’s online gambling legalization imposes its approach to gambling on the citizens of his home state, South Carolina. GPS technology keeps that from happening, so, in fact, Lindsey Graham wants to impose South Carolina’s online gambling ban on New Jersey.
