ESPN and DraftKings daily fantasy sports

Monday Night Football hosts Jon Gruden, left, and Mike Tirico will no longer have to reference daily fantasy sports after ESPN and DraftKings severed ties this week. (Image: usatoday.com)

ESPN and DraftKings have terminated their marketing contract for the daily fantasy sports (DFS) platform’s exclusivity on the popular cable sports television network. It was only last June that the two parties reached an agreement in a deal that reportedly committed DraftKings into $200 million in annual ad spend on ESPN properties in exchange for FanDuel and other DFS companies being barred from advertising on the Disney-owned channel.

“ESPN and DraftKings share a history of innovating and advancing fantasy sports to serve this passionate fan base,” ESPN President John Skipper said last summer. “DraftKings is a dynamic company, deeply connected to its fans, and we’re excited to have them on board as our official daily fantasy sports offering.”

Yahoo Finance was first to report that the deal has now been annulled, though both sides aren’t publicly addressing the contract voidance. Rumors are circulating as to why the sides decided to end the arrangement, but the leading theory is that DraftKings wanted and needed out.

Daily Fantasy Lawsuits

When ESPN and DraftKings reached their $200 million yearly pact, it was attractive to the online fantasy contests supplier as the market was still in its infancy and DFS operators were still scrambling to petition new customers. Obtaining an advertising monopoly on television’s most-watched sports channel presumably made sense at the time, but today the environment has been drastically altered.

The heavy saturation of DFS commercials from DraftKings and its rival FanDuel reached the eyes of not only potential players, but also numerous state attorneys general. From New York and Illinois, down to Texas and out to Hawaii, leading state lawmakers have called into question the legality of DFS games.

That has naturally forced DraftKings and FanDuel into a series of legal battles, most notably in New York, which is ironically the same state the latter calls home. New York Attorney General Eric Schneiderman wants to penalize the two leading DFS suppliers upwards of $5,000 per customer.

Spending one-fifth of a billion dollars annually on ESPN marketing while the entire industry is legally unstable is plausibly why DraftKings got out of the advertising commitment. Fortunately for the DFS company, it appears ESPN obliged the request, though at what expense remains unknown.

No Big Deal

DraftKings stepping away from ESPN might signal a downturn to the DFS market, but it’s more likely much ado about little. Unfortunately for ESPN viewers who’ve grown weary of daily fantasy commercials, DraftKings will continue advertising on the channel, and now FanDuel can too.

The DraftKings development simply frees up funds for the operator to make its case in courts across the country. While several attorneys general are trying to outlaw DFS, a host of lawmakers in as many as 21 states have introduced legislation to regulate the contests and implement consumer safeguards.

Should larger states like California and Pennsylvania decide to authorize DFS, a chain reaction could result and a more accepted legal opinion on the market might resonate with lawmakers in additional jurisdictions. And if that happens, sports fans should ready themselves for an unprecedented marketing blitz from DraftKings and FanDuel.

sports betting Super Bowl 50 NFL

NFL Commissioner Roger Goodell is against sports betting, but new data suggests the fans that support his league want the market liberalized. (Image: usatoday.com/AP)

Sports betting is illegal nearly everywhere in the United States except Nevada, but the vast majority of Americans who plan on watching the Super Bowl think that needs to change.

The study comes at one of the most active times for Las Vegas sportsbooks as Super Bowl 50 between the Carolina Panthers and Denver Broncos takes place on Sunday, February 7.

According to a recent poll conducted by the American Gaming Association (AGA), eight in 10 US residents who plan to tune in on Sunday believe the current federal sports betting law should be amended. 66 percent also said they favor giving states the power to decide whether to permit such wagering.

“America’s passion for football is rivaled only by its enthusiasm for sports betting,” AGA President Geoff Freeman said in a statement. “Fans believe regulated sports betting enhances the game experience, deepens their engagement with their favorite athletes and teams and protects the integrity of games.”

Public Policy

Pollster Mark Mellman believes it’s time for lawmakers to abide by the wishes of American citizens. “If the public had its way, public policy would change,” Mellman said.

Mellman conducted 800 interviews for the AGA poll with male and female adults aged 18 and over. “This first-of-its-kind poll shows clear support among Super Bowl viewers for a state-by-state regulatory approach to sports betting.”

More than $115 million is expected to be bet legally on Super Bowl 50, but it’s the illegal black market where you’ll find the truly high stakes. The AGA estimates $4.2 billion will be wagered on Sunday’s results.

For now, US citizens looking to add a bit of financial excitement to the big game are forced to wager on offshore sites or compete among friends. Daily fantasy sports (DFS) also provide various forms of online betting for Americans, though operators like DraftKings and FanDuel are prohibited from offering traditional bets like a point spread or money line.

Online is Offline for 2016

The surprising things you can do online still come with plenty of shock value. People in America can order venomous reptiles through the Internet, order sperm, and even buy handguns, but it’s online gambling where the federal government draws the line.

The nearly quarter-century old Professional and Amateur Sports Protection Act (PASPA) has kept sports betting illegal for 24 years. Four states were excused from the law due to operating sportsbooks before PASPA’s 1992 passage.

Oregon, Montana, and Delaware could provide sports wagering to their residents, but today only Nevada has legal sports betting. Several Nevada casinos additionally offer their books online to locals.

The NFL has long opposed sports gambling and has expressed concerns regarding DFS.

The Oakland Raiders are rumored to be close to proposing a formal bid to relocate to Las Vegas. Should that happen, the conversation surrounding sports betting and online daily fantasy contests will gather momentum that owners and NFL Commissioner Roger Goodell will need to address.

The NFL believes public betting on its games could lead to integrity compromises. The AGA poll tells a different story by claiming, “65 percent of Super Bowl viewers believe transparent, regulated wagering will either strengthen the integrity of games or have no impact on game outcomes.”

election betting markets John Stossel

Several political and economic analysts believe election betting markets more accurately predict campaign outcomes, and if that is true it appears Hillary Clinton will become America’s next president. (Image: electionbettingodds.com

Election betting in the United States was once a thriving market that catered to thousands of governmental fanatics interested in placing money on their own political knowledge. Today, it’s largely illegal.

However, around the world betting on the outcomes of elections remains popular, and according to several political analysts, the lines and spreads are more accurate than traditional polling data.

Libertarian pundit and FOX News personality John Stossel is one of those who pays closer attention to Betfair.com than any local or national poll.

“Right now the prediction markets are much better,” Stossel said this week. “Pollsters reach only 10 percent of the people who will answer their phones, and also most Americans … are not paying attention to politics.”

In an opinion column this month, Stossel urged Americans not to “trust polls or pundits.” “Betting odds … are the best predictor of who will win any election.”

Stossel isn’t alone in that thinking. “Polls of voter expectations consistently yield more accurate forecasts than polls of voter intentions,” a 2013 study by economists Justin Wolfers and David Rothschild found.

Polls Flawed

Wolfers and Rothschild said the advent of scientific polling in the 1930s has led to more unreliable data in predicting which candidate will actually win. Before the evolution of such methods, newspapers and businesses would predict election outcomes by writing to constituents and asking who they thought would win instead of who they planned to vote for.

In 2016, trading platforms offering election lines more closely resemble that longstanding methodology.

“When a polling company reaches the rare person willing to talk to a stranger on the phone, chances are that person is not well-informed about politics,” Stossel opines. “‘Who do I support… Uh, who’s running? I’m embarrassed! Oh, yes, Donald Trump!'”

Since election wagering sites don’t set lines but aggregate the offerings based on the activity of the collective users, the highly touted “wisdom of the crowds” is in play. “Prediction markets have proven to be much more accurate in terms of predicting the ultimate outcome,” prediction expert Dr. Emile Servan-Schreiber told VICE in December.

Who’ll Win, Where to Play

Who will become the next president of the United States? If the aforementioned experts and analysts are correct in believing prediction markets are accurate, Hillary Clinton will replace Barack Obama in January of 2017.

Clinton has a 51.4 percent chance of winning at the time of this writing, while Donald Trump is in second at 15.4 percent, Florida Senator Marco Rubio (R) at 12 percent, and Vermont Senator Bernie Sanders (I) in fourth at 9.1 percent. Clinton is the heavy favorite for the Democrat Primary at nearly 80 percent, while Trump commands the GOP ticket at 38 percent.

A civil lawsuit in 2012 by the US Commodity Futures Trading Commission against Intrade.com shut down the then-popular political trading exchange. Four years later, Americans are now largely confined to betting on PredictIt.com.

Stossel cautions users that the odds are not efficient on PredictIt.com due to the lines exceeding 100 percent. The current offerings on the US presidency total 143 percent, making any bet a player places worse than a market capped at 100 percent.

Powerball $1.6 billion lottery jackpot

If you’re holding a Powerball ticket with these five numbers and red ball, you’re one of three winners set to split $1.6 billion. (Image: wsbtv.com)

This week’s $1.6 billion Powerball jackpot was the largest lottery prize in world history and more than double that of the 2012 Mega Millions, the former all-time record holder in the United States.

The Powerball began on November 7 with $40 million.

Around 1.5 billion tickets were sold over the 20 drawings that followed, allowing the jackpot to climb to its record-setting tier.

It all ended on Wednesday after three winners matched all five numbers and correctly chose the Powerball out of 26 numbers.

The three lucky individuals are reportedly located in California, Tennessee, and Florida.

Summarizing the Lump Sum

To help ease a bit of jealousy or loser’s remorse, take into consideration that the three winners aren’t actually splitting $1.6 billion but a figure much less.

According to Tracey Cohen, interim director of the DC Lottery, winners should expect to receive about a third of the advertised figure due to federal, state, and local income taxes.

That means the three victors will collect around $540 million total, or $180 million each should they take the lump sum instead of a structured annuity paid out over 29 years.

Of course, $180 million after taxes is certainly more money than most will ever see in their lifetime. Luckily for the hopeful, more billion-dollar Powerballs are expected in the coming years.

The Powerball game had actually been losing money in recent years, which is why officials at the Multi-State Lottery Association (MSLA) altered the format to make the game more difficult to win.

In 2015, the MSLA increased the white ball options from 59 to 69 while decreasing the available Powerball numbers by nine. Slimming the Powerball numbers seems attractive to unsuspecting players, and it does in fact provide better chances of winning some sort of prize.

But for the jackpot, the 10 additional white balls make your odds substantially worse.

Before the changes, the odds of a ticket hitting the jackpot were one in 175,223,510.

Today it’s one 292,201,338.

Bringing Powerball Online

The vast majority of Powerball tickets are still sold the old-fashioned way through physical ticket slips dispensed at authorized MSLA retailers.

Only legal residents of Georgia and Illinois are able to purchase Powerball numbers online, and various restrictions have been implemented including limiting players to buying a maximum of $150 in numbers per day.

In 2011, the Department of Justice released an opinion on online gaming saying the 2006 Unlawful Internet Gambling Enforcement Act applied only to sports betting.

That decision opened up Internet gaming to states wishing to do so and also paved the way for jurisdictions to offer lottery sales through online methods.

While numerous states today sell their own lottery tickets through the Internet, when it comes to multi-state games like the Powerball the legal environment remains somewhat unclear.

Taking multistate lottery games online could lead to new customers venturing to Internet casinos.

For many poker fanatics, playing at least one $10,000 World Series of Poker Main Event is a lifelong goal. For the three Powerball winners, each one could pay the entry fees for the entire tournament for three years, should they be so kind.

daily fantasy sports 2016 news

New York is one of many states currently trying to determine how it will proceed with the divisive daily fantasy sports market. (Image: Richard Drew/Associated Press)

Daily fantasy sports (DFS) is sweeping the nation to kick off the New Year.

As expected, the contests where users pay entry fees to assemble rosters of sports players in order to compete for cash prizes have garnered significant press and generated much controversy from New York to California.

It’s only the first full week of 2016, yet a handful of states are already taking significant steps to both expand and restrict the operations of DFS companies.

With the NFL playoffs set to commence this Saturday and DFS betting expected to reach new benchmarks, timing is of the essence for those looking to regulate or ban the industry.

Massachusetts: Regulate

On December 29, the Massachusetts Lottery initiated a request for information from private vendors to discover how the jurisdiction can grow the market and increase revenues for the Bay State.

“We’re trying to avoid getting so far behind the changes in technology and consumer preferences,” Lottery Director Michael Sweeney told the Boston Globe. “I don’t see that happening now, but I could see that happening in five to six years.”

DraftKings and FanDuel control more than 90 percent of the DFS market, the former headquartered in Boston, the state’s capital and largest city. The information period will run through February.

New York: Ban

Two days after Massachusetts took steps to learn more about DFS, New York Attorney General Eric Schneiderman did just the opposite. Schneiderman labeled DFS as illegal online gambling in mid-November and ordered DraftKings and FanDuel to terminate their operations, but on December 31 he moved all-in.

As families across the country gathered for Christmas Eve, Schneiderman amended his DFS lawsuit by mandating the two leading networks return all entry fees to players and pay a fine up to $5,000 per case. An estimated 600,000 New Yorkers have played on FanDuel or DraftKings.

Schneiderman and Illinois Attorney General Lisa Madigan have both motioned to ban DFS, however customers can still compete in daily fantasy contests in those states for the time being.

Nevada, Arizona, Iowa, Louisiana, Montana, and Washington currently forbid their citizens from participating in DFS.

California: Regulate

The California Assembly Governmental Organization Committee passed an act this week to implement DFS policies and safeguards for the online marketplace and mandate that operators obtain permits from the state’s justice department.

Sponsored by Assemblyman Adam Gray (D-District 21), the Internet Fantasy Sports Game Protection Act commands “a person or entity to apply for, and receive, a license from the Department of Justice prior to offering an Internet fantasy sports game for play in California.”

“We have a responsibility to put safeguards in place to ensure a fair and level playing field,” Gray said.

Wisconsin: Regulate

The second state this week to tackle daily fantasy, Wisconsin State Representative Tyler Vorpagel (R-District 27) confirmed that he is working on drafting legislation to legalize DFS contests.

Though details on the bill are forthcoming, it’s the latest sign in the growing trend of daily fantasy oversight. Many more state decisions are expected in 2016, but they could all be superseded by Congress should politicians in Washington, DC, decide to intervene.

Sheldon Adelson online gambling

Billionaire Sheldon Adelson didn’t have a whole lot to smile about in 2015 regarding his wishes for Congress to move forward with online gambling legislation to ban Internet betting on the federal level. (Image: David Becker/Las Vegas Review-Journal)

Federal online gambling legislation in 2015 captured the attention of billionaires, political prosecutors, lawmakers, and even those campaigning to become the next president of the United States.

Over the last 365 days, online gambling has gone from a scarcely covered topic to the front pages of the New York Times, Wall Street Journal, ESPN, and countless other news outlets.

From daily fantasy sports (DFS) becoming a multibillion-dollar industry to billionaire Sheldon Adelson driving the charge to block all Internet betting, federal online gambling legislation has quickly been thrown into the limelight of the American media.

Cheering RAWA

Las Vegas Sands Chairman Sheldon Adelson is worth between $20 and $30 billion depending on the day, and while it’s unclear exactly how many billions the casino tycoon owns, what is clear is he possesses a passion for fighting online gambling.

One of the most robust GOP political donors, along with his wife giving upwards of $100 million during the 2012 election, Adelson is using his clout in Washington, DC, to encourage Republicans to back the Restoration of America’s Wire Act (RAWA). The bill would ultimately send online gambling into prohibition and override state laws.

Senator Lindsey Graham (R-South Carolina) and Rep. Jason Chaffetz (R-Utah) both obliged and introduced the bill for a second time in their respective legislative chambers. 2016 hopeful Sen. Marco Rubio (R-Florida) cosponsored the Senate version.

Since the Department of Justice (DOJ) released an opinion on the Wire Act in 2011 that effectively opened the possibility for states to legalize online casinos, which three have since done, Adelson has made it a personal mission to restore the Wire Act to include not only sports betting but all forms of Internet wagering.

Fortunately for online poker players and gamblers in Nevada, New Jersey, and Delaware, along with others around the country seeking iGambling and advocates for states’ rights, RAWA has failed to gain much traction.

Chaffetz did hold a committee hearing in late March, but the discussion received some negative press for the seemingly one-sided testimony delivered by the invited witnesses.

DFS Overshadows Sheldon

Unless you just awoke from a 12-month slumber or haven’t turned on a television in equally as long, you’ve heard of DraftKings and FanDuel.

The two daily fantasy leaders have gained an estimated 90 percent control of the DFS market, but 100 percent of the public scrutiny.

The contests came under close examination after a DraftKings employee won $350,000 on FanDuel. Allegations of insider privilege relating to data, as well as criticism of the DFS operators’ corporate procedures, have been discussed in the media and assumedly behind closed doors in state capitols across the country.

The unregulated environment has led to the Department of Justice and federal prosecutors to open formal inquiries into the so-called “skill-based” games, the legal loophole which currently frees DFS of the Unlawful Internet Gambling Enforcement Act of 2006.

Daily fantasy was even discussed at the third Republican primary debate in October, former Florida Governor Jeb Bush saying some sort of regulation is needed while New Jersey Governor Chris Christie interjected by asking, “We’re talking about fantasy football?”

Though no federal bills have been proposed to deal with the looming DFS market and the debate on whether the contests constitute gambling or skill is ongoing, many believe Congress will be forced to address the issue in 2016.

online gambling 2015 Sheldon Adelson

Vegas billionaire Sheldon Adelson remains committed to blocking additional online gambling expansion in 2016, but with several states continuing to debate the topic, the casino tycoon might be in for a long 12 months. (Image: Jeff Scheid/Las Vegas Review-Journal)

Online gambling legislation was discussed across the country in 2015.

From New York down to Mississippi and out west to California, the merits of allowing citizens to place wagers on their computers and mobile devices was a contentious topic over the past 12 months.

States are continuing to rebound from the economic collapse in 2008-2009, with governments searching for new ways to grow revenues from a limited base of taxpayers that can theoretically afford such increases.

Internet casinos provide supplemental income through operating licenses and gaming wins, but at what cost to the public?

Does online gambling do more harm than good?

Can the industry deliver revenues substantial enough to warrant legalization?

In 2015, several states answered those questions.

Major Players

Online gambling has performed well since returning to America in 2013. Though Internet poker has struggled drastically, other games have generated considerable profits.

Those involved with the Internet casino industry are hoping one of the more populated states joins next year. Though New Jersey is the 11th most populated jurisdiction, Nevada and Delaware are 35th and 45th respectively.

Pennsylvania: The Keystone State introduced several online gambling bills in 2015 as politicians in Harrisburg scramble to find ways to support a desired budget increase by Governor Tom Wolf. Pennsylvania seems poised to become the fourth state to legalize online betting.

California: Poker advocates set their sights on California in 2015, organizing coalitions to spread awareness and Amaya sending PokerStars legends Daniel Negreanu and Chris Moneymaker to casinos and card rooms to discuss legalization with citizens. Four pieces of legislation aiming to permit iGaming were authored over the last 12 months, but a complicated environment featuring Native American casinos and horse racetracks makes the Golden State seemingly a long shot for passage anytime soon.

New York: State Senator John Bonacic (R-District 42) led the charge to permit online poker in the Empire State, but to date little movement has been made among his colleagues. The state’s attorney general was also the first to officially investigate the legality of daily fantasy sports, signaling that passing any form of online gambling might be a difficult path ahead.

Supporting Cast

In addition to Pennsylvania, California, and New York, the three states that took most of the iGambling headlines in 2015, four other states motioned to legalize the market.

Mississippi: One of only six states without a lottery, two Magnolia State legislators tried to raise support for the Mississippi Lawful Internet Gaming Act and Mississippi Internet Poker Act. But the bills received little backing, both dying in committee.

Massachusetts: State Sen. Bruce Tarr (R-District 1) attempted to legalize Internet gambling with the intent that all proceeds would go into the state’s “Priority Expense Fund.” The bill is pending in the committee on Economic Development and Emerging Technologies.

Washington: Playing online poker in Washington is considered a felony. State Rep. Sherry Appleton (D-District 23) had hoped to change that by bringing an iPoker bill to Olympia, but the proposition failed to obtain concrete support.

Illinois: Should the Illini join the iGambling movement in 2016, the state would certainly be cast into a lead role as the Land of Lincoln is the fifth-most populated state in America. However, in 2015 lawmakers in Springfield only entered a short provision act that continues to serve as a placeholder.

Restoration of America's Wire Act Chaffetz

Rep. Jason Chaffetz’s Restoration of America’s Wire Act has endured a similar fate as Congress once again passed over its inclusion for the second straight year in the federal spending omnibus bill. (Image: Brendan Hoffman/Getty Images)

The Restoration of America’s Wire Act (RAWA) was the star of a House committee hearing last Wednesday, but this week the bill that would ban online gambling on the federal level failed to receive any type space in a massive, 2,009-page legislative measure.

In a bundle of spending and tax bills packaged into one “omnibus,” Senate Republicans are prepared to approve a $1.1 trillion budget in exchange for $629 billion in tax cuts.

Now in the House of Representatives, the bill is being broken into two votes to separate the tax cuts and spending initiatives.

House Republicans will vote for the tax bill, Democrats will vote for the spending bill, and both bills are expected to pass to avoid a second government shutdown in as many years.

RAWA is co-sponsored by 2016 presidential candidate Sen. Marco Rubio (R-Florida), and has been loitering the halls of Congress for nearly two years.

Rep. Jason Chaffetz (R-Utah) reintroduced the bill in February to the House and Sen. Lindsey Graham (R-South Carolina) reintroduced the legislation to his chamber in June.

No Cheers for RAWA

Chaired by Chaffetz, the House Committee on Oversight & Government Reform (OGR) listened to testimony from four witnesses last week, and while three appeared to support RAWA, it was the lone adversary who seemed to win the argument.

In addition to strong witness testimony from Nevada State Senator Mark Lipparelli (R), the lead architect in legalizing online gambling in the Silver State, numerous House members of the OGR panel seemed against Congress intervening with states’ rights.

Chaffetz was visibly upset at the end of the hearing as he questioned Lipparelli and wrapped up the conversation. Billionaire Las Vegas tycoon Sheldon Adelson is using his political clout to pressure Republican lawmakers to support RAWA.

Released in the middle of the night on Tuesday, the omnibus package addresses a series of issues including lifting the oil export ban, suspending the Cadillac tax on expensive health care plans, ceasing the IRS’ ability to investigate political nonprofit groups, and even urges Capitol Police to go easy on those sledding on the steep hill outside the US Capitol, should it ever snow this winter in Washington, DC.

What isn’t in the massive legislation is an inclusion of RAWA. Similar to last year’s fate, Congress is deciding not to include a ban on Internet gambling for 2016.

Politico’s Isaac Arnsdorf was first to page through the colossal statute and discover that the “Sheldon Adelson-backed online gambling ban is out.”

Reid Loses Too

Adelson, Chaffetz, and Graham aren’t the only ones receiving coal in their congressional stockings. Outgoing Senator Harry Reid (D-Nevada) was trying to weaken a federal law that protects small bondholders in order to help Caesars Entertainment avoid bankruptcy.

Bondholders buy debt from companies, which Caesars has $5.4 billion worth of, with the understanding that they’ll be repaid with interest. According to OpenSecrets.org, Caesars has been one of Reid’s most stout donors.

Senate Republicans didn’t go for Reid’s proposal. 18 legal scholars also decried Reid’s initiative, the lawyers writing in a letter that changing laws through spending and tax bills without proper legal consideration is erroneous.

 RAWA House Oversight Jason Chaffetz

A discussion titled “A Casino in Every Smartphone” was held on Wednesday in the House Oversight committee, the hearing covering the merits of passing RAWA, a bill to ban online gambling. (Image: oversight.house.gov)

The case for RAWA was presented by Rep. Jason Chaffetz (R-Utah) in the House for a second time in 2015, a hearing on Wednesday by the Committee on Government Oversight and Government Reform listening to testimony provided by four witnesses on why Congress should or shouldn’t ban online gambling.

Fueled by billionaire Las Vegas Sands owner Sheldon Adelson, RAWA, the Restoration of America’s Wire Act, seeks to restore federal law to ban all forms of Internet gambling and not just sports betting.

In 2011, the Department of Justice decided the 1961 Wire Act didn’t apply to Internet casinos.

Adelson is thought to be using his campaign contributions to pressure certain GOP lawmakers into supporting RAWA.

“For more than 50 years, we had in place what was called the Wire Act … it’s why you couldn’t go down to Western Union and start wiring money and betting on who knows what,” Chaffetz explained. “That was in place until … with no input from the public or notice to Congress, a single, unelected lawyer in the Office of Legal Counsel, the Department of Justice, released a 13-page memo reversing 50 years of Department of Justice precedent and an understanding Congress had that the Wire Act was in place to prohibit the use of wires to engage in gambling.”

Leading Questions

The four witnesses were:

Nevada State Senator Mark Lipparelli (R), the former executive director of the Nevada Gaming Control Board who was influential in legalizing online poker in his state. Lipparelli appeared to be the sole witness advocating for iGaming during the hearing.

FBI Assistant Director Joseph Campbell explained that online gambling presents serious enforcement issues for his criminal investigative division.

South Carolina Attorney General Alan Wilson (R) was the lead proponent for RAWA. Wilson and Lipparelli shared the most floor time and came across as the two most knowledgeable witnesses, though with starkly different views.

Nebraska county attorney Donald Kleine seemed out of place at times and spoke infrequently.

OGR committee members each took five-minute turns pressing the witnesses on various subjects. One of the main queries representatives sought answers to is why Congress should ban online gaming, and if it did, would the Tenth Amendment be violated.

Wilson was steadfast throughout the hearing that RAWA should be passed, but did make a small concession on states’ rights.

“When you make online gambling proliferated across the country, it is very difficult for states like South Carolina to enforce its gambling laws. I believe under the Tenth Amendment states should be able to outlaw Internet gambling, but those states that want gambling can certainly pass those laws.”

Chaffetz Against OGR

It became rather apparent during the multiple hours of testimony and questioning being presented by OGR members that Chaffetz didn’t have much support for RAWA.

Rep. Ted Lieu (D-California) called testimony from Wilson and Kleine that technology can’t pinpoint a computer factually wrong. Rep. Bonnie Watson Coleman (D-New Jersey) grilled Campbell to provide one instance of criminals using regulated gaming operators to launder money or illicit activities, which he could not.

Rep. Mick Mulvaney (R-South Carolina) and Rep. Thomas Massie (R-Kentucky) raised concerns about online gun sales, and Mulvaney even got into a tense exchange with Chaffetz for not being allowed to ask one additional question when his five minutes expired.

Rep. Stacey Plaskett (D-Virgin Islands) said she’s worked in the DOJ, and Chaffetz’s argument that the 2011 opinion was rushed through is inaccurate. “The idea that this was drafted, written, and signed in the middle of the night is somewhat a difficult stretch of my imagination knowing the inner workings of the Justice Department.”

RAWA hearing Jason Chaffetz

Rep. Jason Chaffetz is back fighting online gambling, the Utah congressman bringing RAWA to the House Oversight Committee for a hearing scheduled for next week. (Image: Cliff Owen/Associated Press)

RAWA, the Restoration of America’s Wire Act (HR 707), has been floating around the halls of Congress for over 10 months.

The bill that would override current laws in Nevada, New Jersey, and Delaware and effectively ban all forms of online gaming has struggled to gain much support among federal lawmakers, but that isn’t stopping billionaire Sheldon Adelson from continuing to pressure the few politicians he’s persuaded from staying the course.

After weeks of rumors regarding a potential hearing, the House Committee on Oversight and Government Reform confirmed this week the bill we be discussed on Wednesday, December 9.

Instead of simply calling it a “RAWA Hearing,” the committee is possibly showing its hand by titling it, “A Casino in Every Smartphone: Law Enforcement Implications.”

RAWA Second and Long

Last March, the House Judiciary Committee listened to arguments regarding RAWA. The seemingly one-sided testimony from the invited witnesses was criticized in the media and possibly caused few other elected leaders from joining in support.

First introduced in the House by Rep. Jason Chaffetz (R-Utah) in February of 2015, the four-term representative is moving the legislation he authored from the Judiciary to Oversight Committee for good reason as he chairs the latter. 

That doesn’t mean Oversight members will be more prone to supporting the bill. Of the 43 representatives sitting on the committee, just two others besides Chaffetz have added their signatures to RAWA, Reps. Trey Gowdy (R-South Carolina) and John Mica (R-Florida).

The committee hasn’t revealed who will be welcomed to the Rayburn Office Building next Wednesday to provide statements regarding online gambling.

Smart Money on Laxalt

One potential witness is Nevada Attorney General Adam Laxalt, one of only three attorneys general that signed a letter supporting RAWA that was distributed to all 50 of the principal legal officers.

“We need to return back the status quo,” Laxalt said on the PBS program “Ralston Live” in late November. Laxalt disagrees with the 2011 ruling made by the Department of Justice that said the Wire Act pertains specifically to sports betting and not general gambling, the Nevada attorney general saying “all parties needed to be involved” for a decision of such consequences.

The attorneys general for both New Jersey and Delaware, the two other states with legalized online gambling, opted not to sign the RAWA letter.

That means all eyes could be on Laxalt should the attorney general be invited to the House hearing as he’ll be forced to specifically identify why he supports restoring the Wire Act to its pre-2011 interpretation.

Climate Change 

Since the last RAWA examination, much has changed in the Internet betting world. DraftKings and FanDuel have exploded across the country and initiated a national conversation on how not only daily fantasy sports are regulated but also online gambling.

Pennsylvania is strongly believed the likeliest state to become the fourth in the country to legalize gaming online, with fellow mega-states New York and California also considering such propositions.

Proponents of iGambling claim the geo-location technology is here to properly determine where a computer is trying to access a casino, and validation safeguards to block minors and problem gamblers are also readily available.