A bipartisan federal bill backed by Sheldon Adelson was introduced last Wednesday, dividing Congress over the issue of online gambling.
The Restoration of America's Wire Act (Bills HR4301 and S2159) would close the loophole that means the Interstate Wire Act of 1961 only applies to sports betting, as interpreted by the Department of Justice in 2011. This would mean the $8bn industry would be outlawed, apart from the national lottery and fantasy sport and horse race betting.
Senator Graham (R-South Carolina), who introduced the bill along with Senator Chaffetz (R-UT), said: "This is yet another example of the Holder Justice Department and Obama administration ignoring the law."
"Because of the Obama administration’s decision, virtually any cell phone or computer can again become a video poker machine. It's simply not right."
Since the 2011 decision, states such as Nevada, Delaware and New Jersey have legalised online gambling. But Sen. Graham believes the decision was invalid having been made by a judge and not by Congress.
Sen. Graham and Chaffetz are not alone. In February Attorney Generals from 16 states wrote to Congress asking that they restore the old interpretation of the Wire Act to allow time for a deeper consideration of the ramifications and effects of the DOJ's interpretation.
Earlier this week the Governors of Texas and South Carolina also expressed concerns to Congress, and the bill has support from a number of Senators such as Sen. Dianne Feinstein (D-California).
High profile casino mogul and anti-online gambling advocate Sheldon Adelson has also backed the bill, citing concerns that minors and other vulnerable people are currently at risk even in their own homes. Adelson recently bankrolled a new group, the Coalition to Stop Internet Gambling, after threatening to withdraw from the American Gaming Association if they continued to back i-gaming.
The proposed bill closely resembles the policy goals of the CSTG and many believe Adelson played a significant role in its introduction, with one of his lobbyists even listed as an author in the draft version.
Rival casinos and online poker companies have responded by forming the Coalition for Consumer and Online Protection, along with Rep. Michael G. Oxley who previously campaigned against online gambling but now thinks that state regulation is the "best hope" of countering its "rapid expansion".
Pro-online gaming group Safe and Secure Internet Gambling Initiative has also objected to the bill. Spokesman Michael Waxman said it would be "ludicrous and downright foolish" to reverse the 2011 decision and asked Congress to look to states that have successfully implemented online gambling. With safeguards and oversight, the SSIGI believes the decision to introduce i-gaming should be made at state level.
The bill doesn't provide for the states that have already rolled out online gambling. If the bill is successful they would likely have to approach Congress for permission to keep their online markets in business.