WASHINGTON – On March 25, the House Judiciary Subcommittee on Crime, Terrorism, Homeland Security and Investigations held a hearing on H.R. 707, the Restoration of America’s Wire Act (RAWA). RAWA effectively reverses the Department of Justice’s 2011 Legal Opinion on the Wire Act, which concluded that the Act bars sports-related betting over the Internet, but permits other forms of online gambling (e.g., lotteries). Under RAWA, which amends and clarifies certain provisions of the Wire Act, the placing of any bet or wager over the Internet is illegal (with a few limited exceptions).
Following the hearing, the fate of H.R. 707 is far from clear. Most of the members who participated in the hearing did not signal their position on the legislation through their comments or questions. NACS submitted testimony in advance of the hearing in order to represent the convenience retailing industry's views regarding Internet gambling legislation.
The hearing panel included:
- John Warren Kindt, Professor Emeritus of Business Administration, University of Illinois School of Law
- Les Bernal, National Director, Stop Predatory Gambling Foundation
- Michael K. Fagan, Adjunct Professor of Law, Washington University School of Law
- Andrew Moylan, Executive Director and Senior Fellow, R Street
- Parry Aftab, Executive Director, Wired Safety
Although member participation at the hearing was low, several themes emerged during the question and answer session: namely, federalism concerns (i.e., states’ right to control gambling policy within their borders) and availability of online protection mechanisms related to children and money laundering.
Lotteries received some special attention during the hearing. Chairman Rep. Bob Goodlatte (R-VA) asked the panelists if they thought online lottery should be treated differently than other types of online gambling (e.g., poker or sports betting). The panel gave mixed responses, but only one panelist (Kindt) seemed to favor distinguishing between online lottery and other forms of Internet gaming.
Rep. Cedric Richmond (D-LA) questioned the panelists about the impact H.R. 707 would have on education funding in his home state of Louisiana, which currently comes (at least in part) from lottery revenue. Two panelists expressed general concern about relying on gambling revenue (lottery or otherwise) to pay for education.
Kindt pointed to Illinois as an example of how such a policy can actually harm education. He said that in Illinois, gambling revenue is actually misdirected to gambling interests (e.g., lobbyists and gaming operations) and is not funneled to education. Bernal also expressed skepticism about relying on gambling revenue for education, stating that lotteries in particular have not produced the education money they promised and instead, are just making poor citizens poorer.