The Restoration Of America’s Wire Act (RAWA) – FAQ
- 1 What RAWA seeks to do
- 1.1 How the Wire Act applies to online gambling in the status quo
- 2 Sheldon Adelson said to be driving RAWA
- 3 The practical impacts of passing RAWA
- 3.1 RAWA would render state-regulated online gambling illegal
- 3.2 RAWA would render online lottery sales by states illegal
- 3.3 Online horse racing wagering, fantasy sports wagering exempted
- 4 Handicapping RAWA’s Congressional chances
- 5 Political background for RAW
- 5.1 A new tack against online gambling in 2017 and beyond?
- 5.2 No real action on RAWA in 2016
- 5.3 Bill reintroduced in 2015, but failed to advance
- 5.4 Bill originally introduced by Chaffetz and Graham in 2014
- 6 Differences between previous Senate and House versions
- 6.1 Clarifying Wire Act
- 6.2 Lottery exemption
- 6.3 “On the physical premises”
- 6.4 Charitable gambling
Last updated April 2017.
RAWA refers to the “Restoration of America’s Wire Act,” a piece of legislation that has been advocated primarily, although not exclusively, by Republicans. The bill was first introduced in 2014 and has been reintroduced in subsequent sessions.
What RAWA seeks to do
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.
How the Wire Act applies to online gambling in the status quo
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 paper that articulates the original legislative intent of the Wire Act.
Sheldon Adelson said to be driving RAWA
RAWA is widely believed to be driven by casino mogul Sheldon Adelson, who has made little secret of his distaste for regulated online gambling.
Early drafts of the bill (originally titled the Internet Gambling Control Act) reportedly identified an Adelson lobbyist as the author.
The practical impacts of passing RAWA
RAWA’s passage would have a violent, immediate impact on the regulated gambling industry in the United States.
RAWA would render state-regulated online gambling illegal
RAWA does not include any carve out for existing state-regulated online gambling in New Jersey, Delaware and Nevada.
The legal, regulated online gambling industries in those states would be rendered immediately illegal should RAWA pass, with significant consequences for local economies.
This impact has resulted in a deep pool of libertarian opposition to RAWA.
RAWA would render online lottery sales by states illegal
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;
But the online lottery sales that are currently legal in states such as Michigan, Illinois and Georgia would seem to run afoul of the Wire Act post-RAWA’s passage.
Online horse racing wagering, fantasy sports wagering exempted
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.
Read more about the exemptions contained in RAWA and their possible impacts on the bill’s legislative potential.
Handicapping RAWA’s Congressional chances
As written, RAWA faces numerous hurdles, including:
- Sheldon Adelson’s public support for RAWA complicates the optics.
- Powerful conservative groups are allied against RAWA, which they consider a clear affront to the rights of states.
- State lottery directors by and large oppose the bill, as do most commercial casinos outside of Adelson and LVS.
- There’s no obvious path for the bill through the House or the Senate, or for getting past President Obama’s desk.
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.
Political background for RAW
A new tack against online gambling in 2017 and beyond?
Proponents of an online gambling ban looked to take a new tack in 2017, via the executive branch.
Opinions varied on the impact of the administration of President Donald Trump on gaming issues in general and online gambling in particular.
What we do know is that new Attorney General Jeff Sessions isn’t a fan of the DOJ’s interpretation of the Wire Act; he said as much in his confirmation hearing. There have been indications that he would revisit the DOJ’s position from his office.
No new RAWA efforts have cropped up in Congress yet. However, the media is linking donations by Adelson to Trump as seeking to influence policy on online gambling.
Rep. Jason Chaffetz (R-Utah), the leader of RAWA efforts in the House, said he is retiring, further clouding legislation’s chances.
No real action on RAWA in 2016
RAWA mostly took the year off in 2016. Chatter had proponents of the online gambling ban “refining their position.”
An attempt by Sen. Lindsey Graham (R-South Carolina) to add pro-RAWA language to a larger spending bill didn’t make it to the finish line. And even if it had, it wouldn’t have actually changed the Wire Act.
The possibility of passing RAWA late in the year never materialized.
Bill reintroduced in 2015, but failed to advance
The Restoration of America’s Wire Act (RAWA) was reintroduced in both chambers of Congress in 2015.
- Graham — after no small amount of delay — filed S 1668 in June 2015. Full text here. Graham was joined in submitting S 1668 by fellow Senator and presidential hopeful Marco Rubio (R- Florida).
- Chaffetz reintroduced the House version of RAWA in February 2015 via HR 707. That bill currently sits with the House Judiciary Committee. Full text here. The most recent activity was a March 25th hearing in the Subcommittee on Crime, Terrorism, Homeland Security and Investigations. A House hearing held in December didn’t go well for Chaffetz and RAWA supporters.
Bill originally introduced by Chaffetz and Graham in 2014
The first version of Restoration of America’s Wire Act was formally introduced by Graham and Chaffetz in March of 2014.
Read the text of the bill here. See the House version (HR 4301) here, and for the Senate version (S 2159) here. The bills are identical.
A plan to hold a lame duck hearing on RAWA in the House was scuttled in late November 2014.
RAWA reportedly remained in play as a possible rider to a must-piece pass of legislation such as the cromnibus.
But the budget bill was ultimately passed without RAWA attached.
Differences between previous Senate and House versions
While the broad aim of the House and Senate versions have generally been aligned, there have been some points of difference between the bills.
Clarifying Wire Act
In Sec 2(1)(C). HR 707 called for:
striking ‘‘placing of bets or wagers’’ and inserting ‘‘placing of any bet or wager’’
But S 1168 did not address that language and instead in Sec 2(1)(C) called for:
striking ‘‘or for information assisting in the placing of bets or wagers,’’;
In Sec 3(2)(B) the two bills took 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;
“On the physical premises”
S 1668 added a completely new exemption to Sec 3 via (2)(c), which stated 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 called 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 referred to “the relationship between Federal laws and State charitable gaming laws.”