The Restoration of America’s Wire Act (RAWA) has now been reintroduced in both chambers of Congress for 2015.
The Restoration of America’s Wire Act would rewrite the Federal Wire Act of 1961 with the goal of extending the Wire Act to ban most forms of online gambling (whether such activity was legalized and regulated by state governments or not) while simultaneously granting a broad class of activities – including daily fantasy sports – an exemption from the Wire Act.
The Department of Justice’s current position on the Wire Act as it applies to online gambling is that the Wire Act only applies to online sports betting.
The use of the term “restoration” in RAWA’s title is a misnomer, as the original Wire Act, passed in 1961, could not (and did not) speak to the use of the Internet as a wagering medium.
To better appreciate what an actual “restoration” of the Wire Act would resemble, refer to Michelle Minton’s recently-published paper that articulates the original legislative intent of the Wire Act.
RAWA’S passage would have a violent, immediate impact on the regulated gambling industry in the United States.
The legal, regulated online gambling industries in those states would be rendered immediately illegal should RAWA pass, with significant consequences for local economies.
RAWA contains a clause (Sec 3 (2)(B)) that appears to carve out an exemption for in-person state lottery sales:
Nothing in this act […] shall be construed […] to alter, limit or extend […] the ability of a State licensed lottery retailer to make in-person, computer-generated retail lottery sales under applicable Federal and State laws in effect on the date of the enactment of this Act;
In addition to revising the Wire Act to expressly prohibit some activity, RAWA would further rewrite the Wire Act to include a blanket exemption for others.
For example, RAWA exempts “any activities set forth in section 5362(1)(E) of title 16 31” (aka the UIGEA exemptions) from the definition of “bet or wager” in the Wire Act. Such activities include fantasy sports betting, insurance, and securities.
And RAWA does not “alter, limit or extend” the “the relationship between the Interstate Horseracing Act of 1978 (15 U.S.C. 3001 et 12 seq.) and other Federal laws in effect on the date of enactment of this Act,” meaning that regulated online horse betting is similarly in the clear.
While the broad aim of the House and Senate versions is aligned, there are some points of difference between the two bills.
In Sec 2(1)(C). HR 707 calls for:
striking ‘‘placing of bets or wagers’’ and inserting ‘‘placing of any bet or wager’’
But S 1168 does not address that language and instead in Sec 2(1)(C) calls for:
striking ‘‘or for information assisting in the placing of bets or wagers,’’;
In Sec 3(2)(B) the two bills take slightly different approaches to a lottery carveout.
Nothing in this Act, or the amendments made by this Act, shall be construed […] to alter, limit, or extend […] the ability of a State licensed lottery retailer to make in-person, computer-generated retail lottery sales under applicable Federal and State laws in effect on the date of the enactment of this Act;
Nothing in this Act, or the amendments made by this Act, shall be construed […] to alter, limit, or extend […] the ability of a State licensed lottery 15 (including in conjunction with its supplier) or State licensed retailer to make on-premises retail lottery sales, including through a self-service retail lottery terminal, or to transmit information ancillary to such sales (including information relating to subscriptions or fulfillment of game play), in accordance with applicable Federal and State laws;
S 1668 adds a completely new exemption to Sec 3 via (2)(c), which states that:
Nothing in this Act, or the amendments made by this Act, shall be construed […] to alter, limit, or extend […] the ability of a State licensed gaming establishment or a tribal gaming establishment to transmit information assisting in the placing of a bet or wager on the physical premises of the establishment, in accordance with applicable Federal and State laws;
Finally, HR 707 calls in Sec 3(2)(c) for there to be no impact on “the relationship between Federal laws and State charitable gaming laws in effect on the date of the enactment of this Act.”
SB 1668 simply refers to “the relationship between Federal laws and State charitable gaming laws.”
As written, RAWA faces numerous hurdles, including:
General Congressional inertia and the lack of broad political interest in the issue of online gambling also provide a strong argument that RAWA never makes it to a vote, let alone becomes law.
The first version of Restoration of America’s Wire Act was formally introduced by U.S. Senator Lindsey Graham (R-South Carolina) and Congressman Jason Chaffetz (R-Utah) in March of 2014.
A plan to hold a lame duck hearing on RAWA in the House was scuttled in late November.
But the budget bill was ultimately passed without RAWA attached.
Early drafts of the bill (originally titled the Internet Gambling Control Act) reportedly identified an Adelson lobbyist as the author.