RAWA hearing a disaster for Chaffetz, online gambling ban supporters

Let's be clear: Rep. Jason Chaffetz (R-Utah) doesn't care about facts.

So it's no surprise that the chairman of the House Oversight and Government Reform Committee, who also happens to be one of Sheldon Adelson's best friends, opened a hearing titled "A Casino in Every Smartphone – Law Enforcement Implications" with a slew of misinformation and fearmongering.

"Now, anything connected to the Internet, desktops, laptops, tablets, smartphones, no matter your age, is becoming a casino," said Chaffetz in a rambling 10-minute opening statement. "I've got a problem with that. I think the American people have a problem with that."

Unfortunately for Chaffetz, it didn't appear that many members of the committee had a problem with the status quo, where three states (New Jersey, Nevada and Delaware) have enacted regulations for online gambling and numerous others are offering lottery ticket sales online.

Adelson, the chairman and CEO of Las Vegas Sands, has been an outspoken opponent of regulated online gambling for several years. Chaffetz used the hearing to attempt to move the needle on one of Adelson's top priorities, the Restoration of America's Wire Act (RAWA). The bill would "roll back" the Department of Justice's interpretation of the Wire Act, which changed in 2011 when the DOJ issued a statement that regulated intrastate online gambling was not against the statutes of the law.

"For anybody to argue that the Internet can be walled off and used in just these certain boundaries, it's a joke," said Chaffetz. "Nobody with a straight face is going to come before the American people and say, 'Well, the Internet, it's just for the people of Nevada,' or 'It's just for the people of Rhode Island.' You kidding me?"

And then Nevada State Senator and former Nevada Gaming Control Board member Mark Lipparelli did exactly that.

"We know there have been many attempts to compromise (regulated iGaming) systems," Lipparelli said in his opening statement. "But those issues are being revealed, thwarted, evaluated and, where warranted, new standards are implemented."

While Chaffetz found support from South Carolina Attorney General Alan Wilson and Douglas County (Nebraska) Attorney Donald Kleine, their arguments were ripped to shreds by committee members on both sides of the aisle.

Rep. Bonnie Watson Coleman (D-New Jersey) spoke about New Jersey's experience with regulated Internet gambling. Rep. Thomas Massie (R-Kentucky) asked the FBI's Joseph Campbell if, if the federal government passed an online gambling prohibition, could it also pass sweeping gun control legislation? Reps. Mick Mulvaney (R-South Carolina) and Jody Hice (R-Georgia) both cited serious concerns about the bill's effect on state's rights. Rep. Stephen Lynch (D-Massachusetts) said he believed the legislation would drive more traffic to unregulated online casinos. Rep. Dina Titus (D-Nevada) said she was astounded that Campbell could come testify that regulated Internet gambling presents criminals with opportunities to launder money and fund terrorist acts, yet come to the hearing with zero cases to prove it is happening.

In addition to Lipparelli, who deflected specious arguments over and over, the stars of the hearing were Rep. Ted Lieu (D-California) and Rep. Stacey Plaskett (D-Virgin Islands).

"I have no doubt that you believe in your testimony, but I do have to point out that parts of your testimony are simply wrong," said Lieu, addressing Wilson and Kleine directly. "The notion that you can't pinpoint location is simply incorrect. Look at the GPS on your smartphone. It will tell you where you are relatively accurately."

Plaskett, meanwhile, deconstructed one of Chaffetz's primary objections to the DOJ's reinterpretation of the Wire Act.

"The idea that this was drafted and written and signed in the middle of the night to me is a stretch of my imagination, knowing the inner workings of the Justice Department and knowing how long it takes for an opinion to come out," she said.

She read portions of the 2006 Unlawful Internet Gambling Enforcement Act, pointing out that it specifically allowed for intrastate online gambling regulated by the states.

Near the end of the hearing, Kleine — who was supposed to be supporting RAWA — stated that he had no problem with intrastate online gambling.

"I don't have a problem if Georgia has a lottery and they run it intrastate and they regulate it intrastate," Kleine said in response to Rep. Buddy Carter's question about whether Georgia should be able to continue to sell lottery tickets online.

This hearing clearly didn't go the way Chaffetz was expecting. After taking a break so members could go take a vote on the House floor, the chairman didn't even lead the hearing for most of the second half, only chiming in once to cite a 2007 Washington Post article that stated that three people had used an (offshore) online casino as part of a scheme to fund terrorists.

When he finally returned to issue a closing statement at the end of the hearing, his arguments had been so bruised and battered that his only defense was to go back and repeat them again, hoping that they'd become more believable through repetition.

"I think it's naïve at best to say you're going to put a wall on the Internet and say we're not going to be able to penetrate this," said Chaffetz.

"It was a good hearing today," he said through pursed lips as he closed the session.

It took three hours, but Chaffetz finally said something I could agree with.