By Kate Tummarello - 03/26/14 12:37 PM EDT
Sen. Lindsey Graham (R-S.C.) and Rep. Jason Chaffetz (R-Utah) on Wednesday introduced legislation to ban most forms of online gambling, ratcheting up a lobbying battle that pits casinos and lotteries against conservative donor Sheldon Adelson.
“To have gaming on every smartphone on the country, I just think it’s a bad idea," Chaffetz said during a press event.
Their bill would reverse a 2011 Department of Justice decision that opened the door for online gambling. That decision reinterpreted the Wire Act — a federal statute that had prohibited Internet betting — by limiting its reach to sports.
The Adelson-backed Coalition to Stop Internet Gambling threw its weight — and the weight of its co-chairmen, former New York Gov. George Pataki (R) and former Sen. Blanche Lincoln (D-Ark.) — behind the bill.
“Bipartisan legislation in both the House and Senate is indicative of the strong concerns about Internet gambling,” the group said.
After reports emerged last week that Graham would be introducing an Adelson-aligned bill to ban online poker, prominent Republican governors and potential presidential candidates Rick Perry (Texas) and Nikki Haley (S.C.) sent nearly identical letters to congressional leadership in support.
The Democratic Governors Association responded Wednesday by releasing a letter that objects to a federal prohibition on Internet gaming.
Graham, who is running for reelection this year, pushed back on the notion that he is getting involved in the online gambling fight to court Adelson, who has given millions of dollars to support Republican candidates in recent years.
“The fact that Sheldon is on board is a good thing, but I'm doing this because this is ... what I feel like I should do," Graham said.
Since the Justice Department's decision on the Wire Act, several states have moved forward with efforts to legalize online gambling within their borders. Nevada, Delaware and New Jersey have legalized various forms of online gambling, and a handful of other states are looking to do the same.
Graham and Chaffetz said Congress, and not the Justice Department, should be the one to determine whether the country will allow gambling online.
“It should not be a single person in the bowels of the Department of Justice reinterpreting the law and fundamentally changing the landscape," Chaffetz said.
“If you want to have online gambling, then come to the Congress," Graham said. “Let’s have a debate."
Several other bills have been introduced in Congress to legalize forms of online gambling, including a bill from Rep. Joe Barton (R-Texas) that would legalize online poker in states that choose to participate in a federal licensing system. Chaffetz said he would vote against such a bill and oppose amendments to his bill that would exempt poker.
In addition to Graham, the Senate bill has the support of Sens. Dianne Feinstein (D-Calif.), Mike Lee (R-Utah) and Kelly Ayotte (R-N.H.). Chaffetz’s companion bill has the support of Rep. Tulsi Gabbard (D-Hawaii).
Graham said he's optimistic that they can build bipartisan support and noted the backing of Feinstein, whose state is considering legalizing online gambling.
“Having her a co-sponsor will help a lot," Graham said.
The bill’s sponsors say the ban on online gambling will boost state sovereignty.
Chaffetz pointed to his own state of Utah, one of two that completely bans gambling. “Our state right is we don’t want to have online gambling,” he said.
The other state to completely ban gambling is Hawaii. Gabbard said she was supporting the bill from Graham and Chaffetz to make “sure that we maintain states rights to regulate gambling within their borders.”
Opponents of the bill also cite states’ rights concerns.
The Democratic Governors Association pointed to the revenue that states get from regulating the games.
Barton said his bill to legalize online poker protects state rights because, rather than federally banning the activity, his bill would allow states to opt out of a federal licensing system.
“You won’t find a piece of proposed legislation that better protects state’s rights,” he said. “If a governor doesn’t want online poker in their state, all they have to do is send a letter to the Secretary of Commerce to opt out.”
Barton called the bill from Graham and Chaffetz “an ill-advised effort because you can’t put this genie back in the bottle.”
He pointed to the increasing number of states legalizing online gambling.
“It is inevitable that at some point and time Congress will set the ground rules for regulating online poker across state lines,” he said.
“Internet poker is here to stay.”
Former Reps. Mary Bono (R-Calif.) and Mike Oxley (R-Ohio), chairmen of the Coalition for Consumer and Online Protection, said the online gambling ban would decrease, rather than increase, consumer protections.
"A congressional ban on all regulated online gaming would only ensure that the black market for these activities continues to thrive, making all Americans less safe online," Oxley said in a statement.
Congress should focus on making online gambling safe, not prohibiting it, Bono said.
“There isn’t any question whether Americans are gaming online," she said. "They are."
— This story was updated at 4:30 p.m.