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Lawmakers seek to revive Wire Act

Mar 31, 2014 9:04 PM

After months of speculation as to the role Congress would play regarding online gambling, all doubts were removed last week with the bold announcement from a bipartisan group of lawmakers in both houses of Congress that bills have been filed to restore the 1961 Wire Act.

When the Wire Act became law, all gambling across state lines, exclusive of pari-mutuel wagering on horse races, was prohibited. That interpretation was amended two years ago by Atty. Gen. Eric Holder with the Justice Dept. ruling the Wire Act only banned sports betting.

Proposed legislation presented by Sen. Lindsey Graham, Republican from South Carolina, and Congressman Jason Chaffetz, a Republican from Utah, would reverse that ruling and restore the original intention of the Wire Act to prohibit online gambling.

Both bills have co-sponsors from both the Republican and Democratic sides of the aisle.

In his presentation, Graham said because of the Justice Department ruling, “Virtually any cellphone or computer can again become a video poker machine. It’s simply not right.”

Chaffetz said restoring the earlier interpretation of the 1961 law would be “putting the genie back in the bottle.”

Supporting the effort to ban Internet gambling are Nevada’s two senators. Senate President Harry Reid, a Democrat, said placing a “slot machine in every computer in every home is bad for Nevada and bad for the country.”

Reid, however, said he wanted the proposed legislation to include a waiver that would permit online poker, an activity that originated in Nevada.

Senator Dean Heller, a Republican, echoed Reid’s comments about the danger of online gambling but also emphasized the need for a provision that would exclude Internet poker from the prohibition.

Immediate opposition to the bills came from several different sources, including the Democratic Governors Association, which charged that the return of the Wire Act would set aside state’s rights.

Earlier last week, Jim Murren, chairman and CEO of MGM Resorts International (MGM), a strong supporter of Internet gambling, donned his hat as industry head of the American Gaming Association. He asked that the AGA reduce its activity in supporting online gaming and concentrate instead on other important matters affecting gaming.

Shortly thereafter, Geoff Freeman, AGA CEO, issued a statement saying the organization had established a priority of working with government agencies in developing greater federal compliance to regulations governing financial transactions.

Ray Poirier is the longtime executive editor at GamingToday.

Contact Ray at [email protected].

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