Guy Not Named Sheldon Adelson Thinks PA Should Ban All Online Gambling

Despite a new bill that would prohibit online poker and casinos in Pennsylvania, the state’s momentum seems to be moving toward regulating these games.

Days after the Pennsylvania House Gaming Oversight Committee hosted a positive hearing on potential online gaming expansion, a new bill has emerged in the Keystone State, but this time the sponsor and cosponsors are trying to prohibit online gaming.

This new bill, HB 1013, introduced on April 20 by Representative Thomas Murt and cosponsored by seven other lawmakers expressly prohibits Pennsylvania from regulating online gambling, and makes no qualms about its intention as the memo reads: “Banning Internet Gambling in Pennsylvania.”

The bill’s text reads in part:

“The board shall not promulgate rules and regulations allowing any form of Internet gambling.”

The bill was referred to the House Gaming Oversight Committee after being introduced.

It’s unclear who is pushing for the bill behind the scenes, but it wouldn’t be too much of a surprise if we were to find out Sheldon Adelson’s fingerprints are on the legislation.

New year, new effort at PA online gambling prohibition

A somewhat similar bill was floated last year by Representative Mario Scavello.

Scavello’s bill from 2014 would not only have prohibited online gambling, but it sought to make it a criminal offense, punishable by stiff fines and/or jail time.

A first offense would result in a fine of up to $300 fine and up to 90 days in jail. A second offense could be punishable by a fine of up to $2,500 fine and up to a year in jail.

You read that correctly, Rep. Scavello thought it would be a good idea to send people to prison for playing online poker, because you know, it’s not like we have a prison overcrowding problem.

Scavello’s archaic bill was supported by Sheldon Adelson’s anti-online gambling lobby group, the Coalition to Stop Internet Gambling (CSIG), who called the bill a “step in the right direction,” in a statement by CSIG-cochairs, former New York Governor George Pataki, former Arkansas Senator Blanche Lincoln, and former Denver Mayor Wellington Webb:

“We call on the Pennsylvania Legislature to vote in favor of this bill and send a powerful message that online gaming has no place in American society.”

Scavello’s bill was roundly criticized for its overreach, and eventually left for dead.

While HB 1013 doesn’t go nearly as far, it will almost certainly suffer the same fate.

Here is why.

Spitting into the wind

HB 1013 is unlikely to gain traction for two reasons:

  1. The momentum in Pennsylvania is all on the side of legalization and regulation.
  2. The leadership in the Gaming Oversight Committee is clearly in favor of regulation.

It is certainly not a given that Pennsylvania will pass online gaming legislation in 2015, but it appears to be a case of when not if.

Three different legislators have already introduced bills that would legalize online gaming in the state.

They are:

  1. John Payne’s HB 649, a comprehensive bill that would legalize and regulate online casino and poker;
  2. Nick Micarelli’s HB 695 – a poker-only bill with strict Bad Actor language that goes against the zeitgeist;
  3. Tina Davis’s HB 920, which seems to be little more than a redundant, watered down version of Rep. Payne’s legislation.

The GO Committee is also in the midst of a number of hearings on online gambling. If the next hearing is as positive as the most recent one, HB 1013 will be filed in the large blue file cabinet with waste management emblazoned on the side.

The Gaming Oversight Committee passed a resolution (HR 140) which was also introduced by Chairman Payne. The resolution calls on Congress to oppose Sheldon Adelson’s Restoration of America’s Wire Act (RAWA) bill, and/or any legislation that would prohibit states from legalizing intrastate online gaming.

The resolution easily passed by an 18-8 margin – a clear indication of where the Pennsylvania GO Committee stands on the regulation/prohibition debate.

Finally, considering that House Gaming Oversight Committee Chair John Payne and Democratic Chair Nick Kotik are both pushing for regulation, it’s unlikely they will allow HB 1013 to move forward in the GO Committee.

So you’re saying there’s a chance…

The chances this latest attempt to prohibit online gambling passes are almost nonexistent.

In fact, the bill will likely receive nary a mention in the coming weeks and months as the talk remains focused on expanding into the online gambling sector in the Keystone State.

The appetite for state-level prohibition, particularly in Pennsylvania, is simply not there.

Four Outlandish Things Andy Abboud Will Say At Thursday’s Online Gambling Hearing

A preview of what to expect from Las Vegas Sands’ Andy Abboud when he appears at this week’s hearing to discuss regulating Pennsylvania online gambling.

Andy Abboud, the Las Vegas Sands Senior Vice President of Government Relations and Community Development, has submitted written testimony ahead of Thursday’s online gambling hearing in front of the Pennsylvania House Gaming Oversight Committee, and as is usually the case with Abboud, his statements are long on fear and short on facts.

Here are some of the mischaracterizations, hyperbole, and outright lies Abboud will attempt to spew forth this week.

Claim #1: The Wire Act has always banned online gambling

In his written testimony Andy Abboud states, “Despite the fact the Justice Department’s Criminal Division had strongly and consistently interpreted the Wire Act as prohibiting all forms of online gambling.”

First, the Wire Act was written in 1961, long before the Internet. The first official opinion on the Wire Act as it relates to online gambling came in 2002.

And while Abboud is correct in asserting the DOJ was consistent in this application from 2002 through 2011, the courts were not in agreement.

So, for nine of its 54 years (2002-2011) the DOJ did officially interpret the Wire Act as prohibiting illegal online gambling.

Click here to learn more about the Wire Act and online gambling.

Claim #2: The 2011 Opinion is just, like, your opinion, man

Abboud will also claim, “No laws were changed by Congress…There was just an opinion letter – A letter which as Attorney General Nominee Loretta Lynch said during her nomination process, does not have the force of law and can be changed at any time.”

As I noted in this column and above, the Wire Act Abboud and his boss Sheldon Adelson want is the 2002-2011 Wire Act, which just so happens to be the very thing they are now railing against, an opinion letter by the DOJ.

And here is what Loretta Lynch had to say about the OLC opinion in full context:

“[…] it is my understanding that the Office strives to provide an objective assessment of the law using traditional tools of statutory interpretation. These tools would not include seeking the views of Congress, the public, law enforcement, or state and local officials on a question of statutory interpretation.”

“It is my understanding that OLC opinions customarily are treated as authoritative by executive agencies. I am not aware of any statute or regulation that gives OLC opinions the force of law.”

Claim #3: Land-based cannibalization and job loss

Andy Abboud apparently hasn’t gotten the memo that online gambling is now seen as complimentary to land-based gaming, since he continues to assert, “Internet gambling is designed to replace people with computer servers – because Internet gambling requires no community investment, no tradesmen, no dealers, and no maintenance workers or servers.”

The idea that online gambling will cannibalize land-based gaming and kill jobs has been debunked over and over again. Online gambling can also be a boon for a local economy.

What online gambling would do is create new jobs in the market, while at the same time insuring Pennsylvania’s land-based casino industry remains healthy and competitive.

The two industries won’t just live side-by-side, they will reinforce one another.

Claim #4: Technology doesn’t work

The last Abboud talking point I’ll address in this column is the following:

“Don’t be fooled by the technology companies that come before this committee today or in the future promising Internet technology that will be able to prevent kids from getting online to gamble – because it is nearly impossible to prevent minors from gambling online.”

Basically, what Abboud is saying is don’t believe what you see with your own eyes, don’t believe experts in the field or the people who regulate them, and forget all the data – just trust me on this…it doesn’t work.

Furthermore, the way Abboud portrays the inability of technology is somewhat surprising since Las Vegas Sands relies on the same technology to safeguard its own on-property online gaming options – yes, you read that right, you can gamble online at the Venetian Hotel and Casino in your hotel room.

Abboud’s go-to example of the inadequacies of the technology is of an adult signing on and then handing their phone to a minor – what seems like an ultra-rare occurrence. This is no different than an adult buying alcohol or any other age-protected item, which is a crime punishable by law whether it’s alcohol or online gambling.

And let’s not forget that same adult could hand their phone to any minor in any hotel room at the Venetian.

If I was GeoComply or CAMS or any other company involved in Internet technology I’d be frothing at the bit at this comment, as it’s patently untrue and borderline libel.

This claim is even more outrageous when you consider the number of cases of underage gambling and drinking Sands Bethlehem has been fined for over the years:

Dust Off The Lucky Mouse: Online Gambling Drawing Closer In PA

Online gambling regulation is a hot topic in Pennsylvania, with three bills to legalize internet poker and casino games floating around in the state.

The Pennsylvania House will have three online gaming bills to choose from following the introduction of an online gaming bill by Representative Tina Davis. The Pennsylvania House of Representative Gaming Oversight Committee will also host two online gambling hearings in the coming weeks, one on April 16 and a second one on May 6.

Davis is a known commodity on this issue as she was an early adopter of legalizing online gaming in PA. Davis first took up the cause back in 2013, but despite her history on this issue, the bill that is likely to be acted upon is the one introduced by Gaming Oversight Chairman John Payne.

Representative Payne and HB 649

Payne’s bill (HB 649) is good reflection of the current landscape, as it doesn’t contain bad actor language and expressly allows for interstate compacts. Additionally, as the GO Committee Chair, and with the support of GO Committee Democratic Co-Chair Nick Kotik, the bill has top-down support from both sides of the aisle.

In addition to the details noted above, Payne’s bill calls for the following:

  • Online gaming sites to be run by brick and mortar casinos licensed in Pennsylvania.
  • $5 million licensing fee for operators and $1 million for “significant” vendors.
  • A 14 percent tax on gross gaming revenue.

While similar in nature, the other two bills that have been introduced have significant flaws.

Representative Davis and HB 920

Davis’s bill is a carbon copy of her 2013 bill and is simply too short on details to be a contender, especially when you consider the crux of Davis’s bill (HB 920) is the same as the more detailed Payne bill.

This shouldn’t be an issue, as Davis, who is also a member of the House Gaming Oversight Committee, cosponsored Representative Payne’s bill.

Put this all together and it seems highly unlikely Davis’s bill will be the one that moves forward.

Representative Miccarelli and HB 695

In contrast, Representative Nick Miccarelli’s bill (HB 695) calls for a starkly different path forward for PA online gaming.

Unfortunately, the bill doesn’t really reflect the online gaming landscape of 2015. The bill would legalize online poker only and contains strict bad actor language that would prohibit PokerStars from applying for a license.

Like Davis, Miccarelli is also a cosponsor of Payne’s HB 649.

Last year this would have been a perfectly reasonable bill (Caesars was lobbying for just such a bill in 2014), but the consensus opinion in the industry in 2015 is online poker by itself will not produce enough revenue for the state to bother regulating, and with the new alliance between Caesars and PokerStars, the calls for strict bad actor language have diminished.

Miccarelli’s bill is a legitimate alternative to the legislation introduced by Representative Payne, but it seems unlikely to gain any traction due to its restrictive nature.

April 16 hearing

On April 16 the House Gaming Oversight Committee will, for the first time in 2015, host a hearing focused completely on online gambling.

The hearing is part of a host of hearings (dealing with online gambling, skill versus chance, and the 2014 small games of chance bill) scheduled by GO Chairman Payne in what he calls an effort to keep Pennsylvania’s gaming industry healthy and competitive.

Online gaming has already been discussed this session, as a pair of informal hearings on gaming held at Harrah’s Philadelphia and Sugarhouse Casino on March 18 turned into impromptu online gaming hearings in their own right. You can watch one of the hearings here.

A second hearing, dubbed an informational hearing on online gaming (the hearing also tried to define games of skill versus games of chance) was held on April 1. You can also watch that hearing here.

According to the legislative calendar, the April 16 hearing will also be broadcast.

May 6 hearing added

Yet another online gaming hearing has been added to the legislative calendar on May 6. It’s unclear at this time if the hearing will be broadcast at this time.

The series of hearings seems to be a strong indicator of Pennsylvania’s interest in online gaming expansion.

Payne’s plan

Representative Payne told that his goal is to gather all the facts and then present them to the legislature:

“My job is to introduce legislation in the Gaming Committee that we can present to our leadership team in May and say ‘If we’re serious about this, and we do Internet gaming it would generate this much revenue; fantasy sports this much; fix the small games bill it would do this much; something in private clubs it would do this much.’”

These hearings could culminate with one of the above mentioned online gambling bills passing the GO Committee and possibly being called to the floor for a vote. Another path forward might be for the bill to be swallowed into the state’s budget, as it has tax implications.

It would seem that with his online gaming bill and the slew of hearings he has called, Payne’s plan to keep Pennsylvania gaming healthy and competitive is on the right track.