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Is Congress Mulling Online Gambling Ban with Poker Exemption?

Rumors of a renewed push to ban online gambling at the federal level have started picking up steam, as it appears a more palatable version of Sheldon Adelson’s Restoration of America’s Wire Act (RAWA) bill with several exemptions including online poker may be brought up for a vote in Congress this November.

According to the rumors, RAWA, or a toned-down version of it, would be voted on when lawmakers reconvene following the mid-term election — commonly referred to as a “Lame Duck” session as many of the Senators and Representatives are little more than seat-savers for the men and women who unseated them during the elections.

The new rumor

As Chris Grove reported from C5’s US Online Gaming Conference (USOG), Bally Tech’s John Connelly stated during a panel discussion, “he expects a federal push to make ‘everything other than poker illegal’ this November.”

Adding even more credibility to Connelly’s statement, Editor Victor Rocha responded to Grove’s tweet, saying he has been hearing these same rumors (that there will be a push for an online gambling ban with a poker carveout in November).

Not the first time this has been rumored

Earlier this week, Politico reported a rumored deal was hashed out over the summer between Sheldon Adelson and Senate Majority Leader Harry Reid (D-NV) where the casino magnate would abstain from the 2014 Senate Races in exchange for Reid allowing a vote on Adelson’s RAWA anti-online gambling bill.

Whether the deal is true or not, it does indicate the two have spoken about RAWA.

Any vote on RAWA by Reid would almost certainly have to contain an online poker carveout, or at the very least a grandfather clause for states that have already passed online poker bills, considering the state Reid represents.

You may recall Reid made a halfhearted attempt to pass an online gambling ban with a poker carveout back during the 2012 Lame Duck session, but shelved the idea when he was unable to muster Republican support.

Reid was also linked to another similar attempt along with the junior Senator from Nevada, Dean Heller (R-NV), earlier this year. Once again, the measure was unable to gain enough support to even be introduced.

Back in May another gambling ban with an online poker carveout was reported by Jon Ralston, who later reported Caesars Entertainment was behind the bill. Ralston posted a draft of the legislation on his site, titled the Internet Gambling Prohibition and Control Act of 2014. This bill and the people behind it were never officially confirmed.

A lack of support to introduce a bill wouldn’t be an issue this time around, as the bones of a bill are already in place in the form of RAWA. More importantly, if Adelson is content with a poker exemption, Reid would find the Republican waters a lot more friendly this time around, as Lindsey Graham (R-SC) and other Adelson allies would likely go along with Reid provided the final bill receives Adelson’s blessing.

Why RAWA needs exemptions

As far back as March, I speculated that the end-game for Adelson’s attempted prohibition of online gambling was most likely a compromise bill that saw the prohibition of online gambling with numerous carveouts including online poker.

The issue of online gambling is one that pulls political ideologies in several different directions, as Republican politicians must balance several contentious issues that are at the core of their political philosophies. There is a states’ rights component, a moral “Christian Conservative” component, individual liberty considerations, and of course the revenue potential from the industry.

Further complicating things, there are current exemptions to consider (Horse Racing and Daily Fantasy Sports) as well as the current landscape where three states (Nevada, Delaware, and New Jersey) have passed online gambling laws and have their industries up and running, and three other states (Illinois, Minnesota, and Georgia) are offering online lottery sales.

It would be difficult to muster Republican support without addressing these concerns. For instance, to get Senate Minority Leader Mitch McConnell (R-KY) on board you would need a horseracing exemption, as you won’t get a Kentucky senator’s support without it.

This same scenario will almost certainly play out across Congress.

You also have several other states exploring their online options, from online poker in California to online lottery sales in West Virginia. Lawmakers from these states as well as Pennsylvania, Massachusetts, Mississippi, and New York would all need to weigh the local politics back home at the state level with their vote on online gambling at the federal level.

Finally, a full ban of online gambling also opens the door to legal challenges, as Illinois, Minnesota, Georgia, Nevada, Delaware, and New Jersey would likely challenge any attempt to repeal their online gaming/lottery laws.

It’s also quite likely that a passable bill would contain grandfather clauses for New Jersey’s and Delaware’s online casino games.

All of these interests would need to be appeased, and a compromise bill seems to be the only solution.

It’s still a long-shot, but the path is starting to become more visible.

Is Poker-Only what Sheldon Adelson wanted/expected all along?

One of the earliest hints that compromise wasn’t out of the question (even though Adelson was adamant he wanted a comprehensive ban) was when RAWA sponsor Lindsey Graham intimated that compromise was a perfectly acceptable outcome, telling the Las Vegas Sun back in March, “If you want to have online gambling, then come to the Congress. … If you want to have a poker exception, offer an amendment and see if it will pass.”

As I opined at the time, “Was his [Sheldon Adelson] call for a ban on everything, simply an instance of leveraged bargaining?”One would assume that Adelson understood the politics of the issue and understood the slim chance a comprehensive ban would have to even be voted on as sitting members of Congress are unlikely to take a vote on an issue that will alienate a significant portion of their constituents.

Perhaps he has always seen online poker as the bone to throw to the other side to get what he truly wants: A ban on online house banked casino games?

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Steve Ruddock

Steve is veteran of the the poker industry, first as a player and now as a writer focusing mainly on the regulated U.S. markets and the politics of poker. Follow Steve on Twitter @SteveRuddock and at Google+.