Congress held a hearing on the Restoration of America’s Wire Act — a bill to ban online gaming and poker in the United States — last week, and one witness suggested daily fantasy sports should be included in the legislation.
Closing a loophole?
The suggestion in front of the Subcommittee on Crime, Terrorism, Homeland Security, and Investigations came from John W. Kindt, an unabashed opponent of online gaming and a professor of business and legal policy at the University of Illinois. While the focus of the bill is generally on online casino games and poker, DFS did not escape the hearing without a mention.
iGaming journalist Dan Cypra noted Kindt’s suggestion that DFS should be lumped in with other types of gaming:
John Warren Kindt asks for fantasy sports loophole in UIGEA to be closed.
— Dan Cypra (@cypradn) March 25, 2015
Kindt even mentioned DFS near the start of his prepared statement for the subcomittee:
Internet gambling is an issue of strategic financial stability and Wall Street regulation. It is not an issue of electronic poker, daily fantasy sports gambling, and other gambling methodologies—which are actually proposals to leverage gateways for legalizing various gambling activities throughout international cyberspace.
You can read his full testimony here.
Does Kindt’s statement mean anything?
Kindt holds an anti-iGaming stance that is as extreme as there is in the U.S. For example, here is the poker advocacy group, the Poker Players Alliance, after hearing Kindt’s testinmony:
Kindt hates gambling, we get it.
— PokerPlayersAlliance (@ppapoker) March 25, 2015
So, it’s unclear how influential Kindt’s testimony could be. Why is it unlikely that RAWA would ever ban DFS?
- The forces behind RAWA — namely casino mogul Sheldon Adelson — didn’t put a ban on DFS in the bill’s original language. Adelson, the CEO of Las Vegas Sands Corp., has carefully crafted his opposition to iGaming. When he had someone draft RAWA, it’s unlikely he left out language that would also ban DFS on purpose.
- RAWA, if anything, has been backtracking on what is covered, not adding to it. RAWA would ban online lotteries, which obviously is not very popular with state lotteries. Sen. Lindsey Graham, one of the proponents of RAWA, has shown a willingness to exempt lotteries. The forces behind RAWA don’t seem to be in the business of making more things illegal, only in garnering support for the core legislation that Adelson wants to see pass.
- RAWA has little chance of passing as constructed. Even with a carveout for lotteries, there is still a lot of opposition to the bill. The bill basically usurps states’ rights — rolling back online gaming regulation laws that are on the books in Nevada, New Jersey and Delaware. Even some mainstream conservative voices have made their opposition to RAWA known, so it’s hard to believe RAWA will get out of committee, or ever come up in front of a full vote in front of the House or the Senate.
DFS has legal worries, outside of RAWA
Daily fantasy sports certainly aren’t immune to legal issues, however, especially at the state level.
- DFS is not considered legal in all 50 states.
- Last week, Texas saw a bill introduced in front of the state legislature that would require DFS sites operating in the state to receive licenses.
- In Iowa and Washington, jurisdictions considering bills regarding DFS, the debate over whether DFS is a game of skill or a game of chance that should be lumped in with other types of gambling is far from settled.
Daily fantasy sports rely upon an exemption in the Unlawful Internet Gambling Enforcement Act — a federal law — for the industry’s legality. But iGaming law expert Daniel Wallach worries that DFS could run afoul of the Professional and Amateur Sports Protection Act of 1992. Another legal expert in the iGaming legal space, Marc Edelman, outlined other challenges potentially facing DFS.
While RAWA may not pose a threat to DFS, that does not mean that the legality of DFS contests won’t come under fire from other avenues.