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Deck Stacked at House Oversight Committee Hearing on Internet Gambling

Tomorrow the House Oversight and Government Reform (OGR) Committee will hold a hearing titled, “Casino in Every Smartphone – Law Enforcement Implications,” to discuss the ramifications of the legal online gambling market that has arisen in the last two years. As one might glean from the oh-so-objective title, the hearing’s architect, committee Chairmen Jason Chaffetz (R-Utah) isn’t exactly keen on letting Americans legally gamble online. As with last March’s Judiciary hearing, the witness list is stacked against anyone hoping to hear a rational discussion of the truly important law enforcement challenges likely to surface in this nascent market. However, unlike the previous hearing, OGR is a far less friendly committee when it comes to Chaffetz’s attempt to create a national online gambling prohibition.

While about a third of the House Judiciary Subcommittee on Crime signed onto Chaffetz’s bill to ban online gambling, the Restoration of America’s Wire Act (H.R. 707), only three members of the 43-member OGR (including Chaffetz) support his bill. Perhaps worse for Chaffetz, 11 of the 25 Republicans on the Committee are part of the House Republican Freedom Caucus (not including Chaffetz or Jim Jordan, a RAWA cosigner). Freedom Caucus members are usually staunch defenders of the 10th Amendment and will likely rankle at the idea of asking the federal government to come in and overturn the laws of several states.

Of course, those who speak out in favor of federalism aren’t always consistent.

Take, for example, one of the witnesses; South Carolina Attorney General Alan Wilson. He once testified before the House Oversight Committee that “our founding fathers went to great lengths to prevent an out-of-control federal government from meddling in private business decisions or circumventing constitutional amendments approved by overwhelming majorities of a state’s voters…Thankfully, the Constitution, specifically the 10th Amendment, prohibits such overreaches by federal authorities. Our founding fathers believed in a series of checks and balances to limit the federal government.”

However, in the prepared testimony he plans to read at tomorrow’s hearing, Wilson is turning his own argument on its head. “The Federal Government should respect the rights of states, not destroy those rights,” Wilson writes. “It should not legalize gambling activities the states make illegal. But the DOJ Opinion strikes at the very heart of state powers.” An interesting argument considering that the DOJ 2011 opinion simply stated that the federal laws did not prohibit states from legalizing and regulating online gambling within their borders.

It’s no secret that Sheldon Adelson, the multi-billionaire owner of Las Vegas Sands Corp., is the driving force behind Chaffetz’s bill (hell, his lobbyist wrote the thing). And he has worked hard to court state attorneys general over to his side. As The New York Times reported last October, the Las Vegas Sands Corp., through top executives Andy Abboud, gave half a million dollars to the Republican Attorneys General Association. That gift (or their super persuasive arguments) resulted in 16 AGs signing onto a letter to Congress expressing their opposition to the DOJ’s 2011 decision. (Worth noting: that same letter circulated this year received only half the number of AG signers.)

Speaking of Andy Abboud, Adelson’s right-hand-man, he has a connection to another witness at tomorrow’s hearing: Donald W. Kleine. The Douglas County Attorney from Nebraska is sort of a no-name in the field of online gambling, but the Abboud Lawfirm in Nebraska—run by Andy and his brother Chris—gave donations to Kleine’s Douglas County Attorney campaigns between October 2006 and the end of 2014, totaling $7,550. While Andy is the VP of Government Relations for Las Vegas Sands, his brother Chris Abboud is a prominent Omaha lobbyist on behalf of Adelson’s Venetian, which was interested in opening up a casino in Nebraska.

The two remaining witnesses, the FBI’s Joseph Campbell, Assistant Director of the Criminal Investigative Division, will hopefully provide a more neutral take on the risks associated with legal online gambling in the U.S. as opposed to illegal gambling taking place on websites based outside of the country.

And the witness for the Dems, Mark Lipparelli, State Senator for Nevada and former chairman of the Nevada Gaming Control board until 2012, will certainly provide some realistic insight into how states actually use technology and regulation to address concerns about crime and to make sure players are within states that allow online gambling. While other witnesses may claim people are “anonymous” online, Lipparelli will be able to testify to the fact that gambling online, where social security and other identifying information is required, can be safer and far less anonymous than gambling in casinos, which look only at your driver’s license.

We hope some of the members ask questions about a prohibition setting a dangerous precedent of regulating the Internet that could impact other areas online commerce—maybe even some that Republicans would be angry about Dems trying to control (gun and ammo sales, for example). But, we’ll just have to wait until all the cards are on the table at tomorrow’s hearing.