RAWA Online Lottery Carveout May Prove Harmful to iGaming Lobbyists

Hearing2On Wednesday, a hearing was held on Capitol Hill to address the Restoration of America’s Wire Act. Initially, many considered the hearing a waste of time and that the hearing actually helped iPoker lobbyists and their cause. However, developments revealed on Friday could prove harmful as online lotteries may get a carveout.

The House Subcommittee on Crime, Terrorism, Homeland Security, and Investigations held their long awaited hearing on RAWA on Wednesday among major criticism from both online poker lobbyists and states’ rights advocates that the witnesses lacked balance.

The majority of witnesses relied on outdated information and scare tactics to try to influence federal lawmakers that RAWA was a good thing. The only bright spots came from Parry Aftab, internet privacy and security expert, and Andy Moylan of the R Street Institute.

Moylan stressed that RAWA would violate states’ rights and should be reconsidered. Aftab spoke at length on the differences between regulated and unregulated iGaming. She was easily the only witness with any true experience on how iGaming is currently run and this became evident when the majority of panel question on security were directed to her. Ultimately, the message delivered to the panel from Aftab and Moylan was that blocking regulation would actually harm underage youth and would shut down legal online lotteries.

GrahamOnline Lottery Carveout Being Considered

Following Wednesday’s hearing, Senator Lindsey Graham is considering inserting an online lottery carveout to states. He told Gambling Compliance that he wasn’t looking to ban state lotteries from offering online sales and is open to coming up with a compromise for those offering and looking to offering iLottery.

At present, online fantasy sports, horse wagering and charitable gambling are included as exemptions in RAWA. One that is clearly not included, nor does it appear to have a chance of inclusion, is online poker.

The inclusion of a lottery carveout may actually weaken the stance of iGaming lobbyists. With state lotteries on the exemption list, those states would have little reason to battle the bill unless they intend to pursue iGaming regulation. While this is being portrayed as a states’ rights issue, those being appeased by a carveout may have little to no motivation to fight the bill.

The question now become how many states will continue to oppose RAWA if their state lottery is safe. Will that number be enough to block the bill moving forward or has Sen. Lindsey found a way to sidestep that roadblock.

With a lottery carveout, RAWA would essentially ban online gambling in the United States. This has been the primary goal of Sheldon Adelson since the announcement of his anti-iGaming coalition in 2013. What was once viewed as vision that had “no shot” at becoming reality, iGaming lobbyists may now be faced with the reality that RAWA could go to a Congressional vote.

It will be interesting to see what happens in upcoming weeks now that a lottery exemption is being discussed. Will opposition fall or will states see this merely as a tactic to push an unwanted bill through Congress. The next few weeks could be monumental in determining whether RAWA passes or if Sheldon Adelson is defeated at the gates.