Rep. Jason Chaffetz looks to ban online gambling

Published: Wednesday, March 26 2014 3:10 p.m. MDT

Jason Chaffetz announces he will not run for office in the U.S. Senate at the Hinckley Institute of Politics in Salt Lake City on Monday, August 22, 2011. He believes he can do more good in the U.S. House of Representatives and will seek re-election.

Kristin Murphy, Deseret News

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SALT LAKE CITY — A bill introduced Wednesday in Congress would prohibit online gambling and reverse an Obama administration decision that opened the door for states to explore Internet gaming.

The legislation sponsored by Rep. Jason Chaffetz, R-Utah, and Sen. Lindsey Graham, R-S.C., would reinstate the federal policy that bans online gaming.

The U.S. Department of Justice upended its long-held opposition to many forms of Internet gambling in December 2011, opening the door for states to allow online poker and other types of online betting that don't involve sports.

The opinion came in response to requests by New York and Illinois to clarify whether the Wire Act of 1961, which outlaws wagering over telecommunications lines that cross state or national borders, prevented those states from selling lottery tickets over the Internet.

"Now, because of the Obama administration’s decision, virtually any cellphone or computer can again become a video poker machine," Graham said. "It’s simply not right."

Chaffetz said the DOJ paved the way for "massive" policy change without public input.

"These fundamental changes need to go through Congress," he said. "By restoring the original interpretation of the Wire Act, we are putting the genie back in the bottle and allowing for an open debate to take place.”

The bill would return the law to where it was before the DOJ opinion. It would not affect gaming establishments in states where it was legal before 2011 or lottery ticket sales in retail stores.

Utah bans all forms of gambling, and the Legislature passed a bill in 2012 that would allow the state to opt out of any federal law that OKs online gaming. The measure also specifically outlaws gambling on computers and hand-held devices, which was not previously spelled out in Utah law.

Some states, though, are looking to cash in on what has become a global multibillion-dollar online gaming industry.

Overseas, online betting is generating an estimated $32 billion in annual revenue — nearly the size of the U.S. casino market. Juniper Research estimates that betting on mobile devices alone will be a $100 billion worldwide industry by 2017.

The London research company H2 Gambling Capital has said Americans could spend $4.3 billion during the first year alone if Internet gambling were legal nationwide, and that it would grow to $9.6 billion by the fifth year.

Delaware, New Jersey and Nevada have legalized online gaming since the DOJ opinion in 2011, while several others states are considering doing the same.

Courts are split on the issue. The 5th Circuit Court of Appeals in New Orleans has said the Wire Act only applies to sports betting, while district level courts have said it applies to all online gambling. The issue has not gone before the U.S. Supreme Court.

Sen. Mike Lee, R-Utah, and Rep. Jim Matheson, D-Utah, signed on as co-sponsors of the new legislation.

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