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Besting a Billionaire: How a Grassroots Campaign Stopped a Ban on Internet Gambling

This week we get to say goodbye to the 113th Congress. For those who believe in free markets and individual liberty, it was a doozy. There were some losses, but also some big wins. One victory in particular is worth noting because the battle involved one of the worst aspects of politics: entrenched and connected special interests, versus one of the best aspects: a pro-liberty grassroots uprising of individuals against cronyism.

Like all so-called vices, gambling has always had its foes, from religious leaders who believe it is evil to public health professionals and social advocates worrying exploitation of young, ill, and poor. For the most part, these interests have been unable to stop the demand for or rise in legal gambling throughout the United States. But when one of the world’s richest men says he’ll spend what it takes to ban Internet gambling, all bets are off.

Intrastate online gambling does not violate federal law: that was the conclusion the department of justice came to in 2011 after two years of consideration. So long as the gambling was not sports related, no federal laws prohibited states from allowing online gambling within their borders. Within the next two years three states, Delaware, New Jersey, and Nevada, began offering licensed and regulated online gambling.

Not long after that, in November 2013, Sheldon Adelson—CEO of Sands Casino—announced his plan to stop the spread of legal online gambling in the U.S. Coming from the man who almost single-handedly funded Newt Gingrich’s 2012 presidential campaign and who donates millions more to members of Congress—it was a threat that nobody considered empty.

  • December 23, 2011: DOJ declares no federal law preventing intrastate online gambling
  • November 2013: Nevada, New Jersey, Delaware offer legal online gambling
  • November 2013: Adelson announces Coalition to Stop Internet Gambling
  • March 20, 2014: Draft bill written by Adelson’s lobbyist circulated through Congress—on March 26, Sen. Lindsey Graham (R-S.C.) and Rep. Jason Chaffetz (R-Utah) officially introduce the Restoration of America’s Wire Act (S. 2159, H.R. 4301)

By June of 2014, some had declared that Adelson was winning his war on Internet gambling. He managed to hire the services former New York Governor George Pataki, former San Francisco Mayor Willie Brown, former Sen. Blanche Lincoln (R-Ark.), former Denver Mayor Wellington Webb, and former Rep. Connie Mack (R-Fla.) in his fight. He also recruited governors Nikki Haley (R-S.C.), Rick Scott (R-Fla.), Bobby Jindal (R-La.), and Rick Perry (R-Texas) to his side.

In May 2014, the American Gaming Association, which represents casino interests and had been a long-time supporter of legalizing online gambling, suddenly withdrew from the debate. And discussions within states considering legalizing online gambling, such as California, were “put on hold”. Finally, in November of this year, as the 113th Congress began winding down, rumors of the ban being attached to another unrelated, but must-pass bill began to swirl. Adelson’s top lobbyist and right-hand-man, Andy Abboud, seemed to confirm suspicions, hinting in an interview with television journalist Jon Ralston that they had struck a deal with House and Senate leadership, noting “the die is cast on this… the cake is baked.”

Many thought there was a good chance Adelson’s friends would attempt to attach his bill, for which neither Chamber of Congress had held a hearing on, to the CRomnibus spending bill. If that had happened, our cake very well might have been baked. But, by the end of November Adelson’s ban-happy party train suddenly seemed to run out of steam.

The House Subcommittee on Crime, Terrorism, Homeland Security, and Investigations on Crime scuttled a scheduled hearing on Adelson’s bill and by the second week of December the word on the street was that it wasn’t going to happen. House Speaker John Boehner (R-Ohio) reportedly called Adelson personally to let him know that his bill was dead as far as this Congress was concerned. For those unfamiliar with the many decades long fight over online gambling, it might seem utterly baffling that Republicans would tell one of their most generous donors “no.” So, how did Adelson loose the battle?

Long before Adelson began opposing Internet gambling, there was a small group of very dedicated (some might say crazy) people fighting to grant individuals the opportunity to decide for themselves whether or not they wanted legal online gambling. While there were countless thousands of player-advocates and plain old liberty advocates raising their voices in opposition to ban, as well as a few members of Congress quietly asking if prohibition was the way to go, three groups were especially central to fending off Adelson.

Independent journalists: Eventually, mass media outlets began to pay attention to the struggle for and against a national Internet gambling prohibition…eventually. However, there were several outlets and reporters who pursued the issues like a pit bull with a bone. Together, Chris Grove at the Online Poker Report and Steve Ruddock—an independent poker writer—covered just about every aspect of the fight with almost daily updates. Whether about the political back-and-forth or myth-busting the propaganda spread by Adelson’s camp, they collected the information and interviews not being reported on by traditional media. Their work provided the rational, fact-based talking points that those in favor of legalizing online poker used to make their case.

Grassroots: As I said, there were literally thousands of individual players and liberty-minded people opposing Adelson’s online gambling ban. It took the Poker Players Alliance, a nonprofit group representing the interests of online poker players, to bring everyone together. With daily action plans posted for members, panel discussions, radio appearances, testimony to Congress, and outreach to lawmakers, there is no doubt that the PPA is the voice of the grassroots movement to make online gambling legal. 

Think tanks: Yeah, I’m going to toot my horn. CEI has worked on the Internet gambling issue since 2007. Our mission is to promote free markets and individual liberty. Certainly, we don’t have the billions that Adelson has, but this year we put our proverbial money where our mouth is. I wrote dozens of op-eds and letters to the editor, appeared on dozens of radio shows, podcasts, and television shows, spoke on panels and to any member of Congress who would listen to me about why an online gambling ban would not stop the activity and wouldn’t protect consumers.

The turning point, I believe, began around September after the University of Nevada, Las Vegas, published my research on the original intent of the Wire Act—the 1961 law Adelson sought to amend in order to create his online gambling ban—chopping the legs off of Adelson’s argument that they simply wanted to “restore” the Wire Act to its pre-2011 understanding. Next month, UNLV’s gaming law journal will publish my even more robust look into the history of the Wire Act. Other groups, including the Taxpayers Protection Alliance and Campaign for Liberty, strongly opposed the ban, but Grover Norquist’s American’s For Tax Reform joining the fight represented a significant blow to Adelson’s effort. On November 17, former congressman Ron Paul (R-Texas) published a scathing op-ed calling the effort to ban online gambling “crony capitalism” intended to benefit one person. And soon after that, letters from congressmen, including Rep. Frank LoBiondo (R-N.J.), began circulating asking colleagues to oppose the ban. 

It was a team effort and it took our all to win this battle. But it was just a battle… not the war; with the 114th Congress set to begin on January 2, Sen. Harry Reid has said to expect a renewed effort to pass Adelson’s bill in the new Congress. We’ll be ready. As we have all demonstrated in the last year, you don’t need money to defend liberty; you just need people crazy enough to fight for the ability to make their own decision.