10 Reasons Sheldon Adelson’s RAWA is Dead on Arrival

Nolan Dalla recently compiled a list of 10 reasons he fears the Restoration of America’s Wire Act (RAWA) has a good chance of passing in 2015. This is something I strongly disagree with. I agree with many of Nolan’s assertions, I simply disagree with his assessment of their significance.

I don’t feel RAWA is something we should take lightly, but I also don’t believe this is something we should be overly concerned about. Fearing RAWA is giving this bill far more credit than it deserves, and gins up more panic than the bill warrants.

So my mantra for 2015 is, “Be vigilant but don’t cry wolf.” RAWA isn’t DOA as the title suggests, but it’s an extreme long shot to pass as it is currently written.

And here is why…

#10 – The difference between spending and spending wisely

A lot of people seem to be hung up on the amount of money Sheldon Adelson is pouring into this fight, but Adelson pouring money into a cause is not an indication he will get his way. In fact, he’s shown a penchant for basically lighting money on fire.

Does the name Newt Gingrich ring a bell? You know, the guy whose 2012 presidential campaign was essentially singlehandedly funded by Sheldon Adelson to the tune of $50 million.

On top of his 2012 failures, here are the big names he backed in 2010:

  • Carly Fiorina (R-CA) LOST
  • Sharron Angle (R-NV) LOST
  • Sue Lowden (R-NV) LOST
  • Charlie Crist (R-FL) LOST
  • Scott Brown (R-MA) WON THEN LOST IN 2013
  • Roy Blunt (R-MO) WINNER
  • Mark Kirk (R-IL) WINNER
  • Pat Toomey (R-PA) WINNER

At best he batted .500 in 2010, and far worse in 2012, where his major candidates were 0-8.

#9 – Adelson will never get the support of moral crusaders

The problem with a casino billionaire trumpeting moral concerns about gambling is not only laughable, it’s also going to keep politically influential groups like Focus on the Family out of this fight.

They might agree with the message but they simply cannot fall in line behind the messenger.

#8 – Republicans are caught between a rock and a hard place

I’ve said this many times in the past, voting for or against restricting online gambling is a vote no Republican lawmaker wants to make, since no matter which way they vote it will aggravate a very vocal portion of their base.

Basically, do they want to piss off social conservatives, state’s rights advocates, their own state legislatures, or any and all of the above? Because a vote for or against online gambling isn’t just a vote on online gambling, it’s a vote on the 10th amendment and social conservatism.

#7 – Online gambling simply doesn’t resonate

This is another point I’ve made a number of times, but it seems people still haven’t gotten the message. Online gambling is only important to a very small percentage of people in this country.

There is a small constituency (maybe 5-10%) that wants it legalized, and there is a slightly larger constituency (maybe 10-20%) that would like to see it banned. For the other 3/4 of the country online poker and online gambling’s relative importance falls somewhere between colonizing the moon and whether they use Crest or Colgate.

The reason this is so important is it puts these politicians into a situation where they are taking a controversial vote (see #8 above) that will alienate a large segment of their constituency in order to appease 5%-20% of the population – this is the same reason votes to legalize online gambling never went anywhere.

#6 – RAWA’s constitutionality will be challenged

Should RAWA pass, it will be met with years of court battles, as states from New Jersey to California contest the law exceeds the restrictions imposed on the federal government in the 10th amendment.

It would be one thing if no state had legal online gambling, but three do, and several others have online lotteries that would (as the bill is currently written) be reversed by RAWA.

Then there are the states that are exploring iGaming expansion like Pennsylvania and California.

To even be considered RAWA will have to include exemptions ranging from poker and lottery carveouts to grandfather clauses for Delaware and New Jersey. Here is how I envision a passable RAWA bill looking.

#5 – There is too much opposition

Opposing RAWA is perhaps the most diverse coalition I’ve ever seen. On one hand you have Libertarians screaming state’s rights and personal freedoms, on the other hand you have Democrats screaming crony capitalism, and on the third hand (can you have a third hand?) there are realists calmly explaining factors such as tax revenue and consumer protections.

Everyone from Ron Paul to Grover Norquist to FreedomWorks, to the Fraternal Order of Police to the Democratic Governor’s Association has come out against this bill.

And the more “progress” RAWA makes the more groups speak out against it.

During last year’s Lame Duck session the very mention of RAWA being added to the CRomnibus caused an avalanche of opposition. RAWA’s mere reintroduction this year has already been met with opposition as well.

#4 – Nobody on Team RAWA really cares about the issue

Limiting online gambling wasn’t a campaign pledge, and quite frankly, other than Jason Chaffetz the entire RAWA crowd, Lindsey Graham, Blanch Lincoln, Willie Brown, George Pataki, and Wellington Webb, would probably argue either way on this issue, depending on who is paying their salary or contributing to their campaign – some like Willie Brown did just that.

This is war being waged by mercenaries, not people defending their homes.

Hell, even Adelson is a bit wishy washy on online gambling!

#3 – Adelson’s arguments have been met with snickers and giggles

The idea of a 7 year old stealing his parent’s iPhone and hacking their online poker accounts with stolen credit cards is pretty farfetched even for politically motivated debates.

Sure these claims resonate with people that already agree with him (online gambling is the devil) but they are not changing opinions.

The way Adelson’s talking heads have been assaulted in hearings (often with chuckles coming from the assembled crowd when Andy Abboud or some other Adelson ally fumbles over their talking points) tells you everything you need to know about their talking points.

#2 – Sheldon Adelson is the vanguard!

As CAMS CEO Matthew Katz told me, he’s much more comfortable with Adelson being the point man in this fight than some other person or entity, with far less baggage. “It’s inevitable somebody will question the integrity of the system,” Katz said.

Adelson’s views on online gambling have led to him being called a hypocrite, and his criticisms of iGaming regulations have led to people pointing out his own company’s troubles with money laundering and underage drinking and gambling.

#1 – There is no CRomnibus to attach it to

In 2015 RAWA will have to take the more conventional approach of passing as a singular bill. This is critically important as it means lawmakers can’t explain away their vote as “well we had to pass a budget and there were a few things I didn’t like but could do nothing about.”

It’s possible RAWA could get slipped into a piece of legislation, but this is far less likely in 2015 than it was last year, which is why RAWA was specifically targeted for the Lame Duck.

Final Thoughts

Adelson wants RAWA to pass, but he’s no fool and likely understands it will be difficult. However RAWA serves a second purpose as it acts as a Sword of Damocles over state legislatures who may be considering expanding into online gambling. And it’s this fear of RAWA that could impede state level legislation – which is why I caution people not to give RAWA more credit than it deserves.

“Why don’t we wait and see what happens at the federal level first?” is one way RAWA could stall state level legislation, and it also diverts OUR attention from legalization efforts to fighting against a prohibition.

About the Author

Steve Ruddock

Steve is a seasoned veteran of the online gambling industry, having written about it from every possible angle in his many years as a freelance gaming writer. Based in Massachusetts, Steve especially focuses on regulatory and legislative news coverage pertaining to the U.S. market.