Mar 26 2014

Graham, Chaffetz Introduce Bipartisan Legislation to Restore Wire Act

WASHINGTON - U.S. Senator Lindsey Graham (R-South Carolina) and Congressman Jason Chaffetz (R-Utah) today introduced their bipartisan legislation, Restoration of America's Wire Act, which restores the long-standing interpretation of the Wire Act and reverses the Department of Justice's abrupt December 2011 decision to expand online gaming.

"This is yet another example of the Holder Justice Department and Obama Administration ignoring the law," said Graham, a member of the Senate Judiciary Committee. "In 1999, South Carolina outlawed video poker and removed over 33,000 video poker machines from within its borders. Now, because of the Obama Administration's decision, virtually any cell phone or computer can again become a video poker machine. It's simply not right."

"The DOJ opened the door for massive change in policy without significant public input. These fundamental changes need to go through Congress. 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," said Chaffetz.

On February 4th of this year, Attorneys General from 16 states and territories wrote to Congress asking, "that Congress restore the decades-long interpretation of the Wire Act to allow Congress and the states to more fully consider the public policy ramifications of the DOJ's reinterpretation of the Wire Act and to give federal and state law enforcement agencies time to fully assess and report on the implications Internet gambling has on our respective charges to protect the citizens of our states." (Letter:

Earlier this week the Governors of Texas and South Carolina also wrote to Congress expressing concerns about the Department of Justice's decision.

Texas Governor Rick Perry wrote, "When gambling occurs in the virtual world, the ability of states to determine whether the activity should be available to its citizens and under what conditions - and to control the activity accordingly - is left subject to the vagaries of the technological marketplace. This seriously compromises the ability of states to control gambling within their borders." (Letter:

South Carolina Governor Nikki Haley said, "Allowing Internet gaming to invade the homes of every American family, and to be piped into our dens, living rooms, workplaces, and even our kids' bedrooms and dorm rooms, is a major decision. We must carefully examine the short and long-term social and economic consequences before Internet gambling spreads." (Letter:

The legislation is cosponsored in the Senate by Senators Dianne Feinstein (D-California), Mike Lee (R-Utah) and Kelly Ayotte (R-New Hampshire). The legislation is cosponsored in the House of Representatives by Reps. Tulsi Gabbard (D - Hawaii), Jim Matheson (D - Utah), Lamar Smith (R - Texas), Jim Jordan (R - Ohio), Trent Franks (R - Arizona), George Holding (R - North Carolina), Frank Wolf (R - Virginia), James Lankford (R - Oklahoma), and Emanuel Cleaver (D - Missouri).



U.S. Senator Dianne Feinstein (D-California):
"I am pleased to join with Senator Graham to update the Wire Act to cover a broad range of online gambling, returning the statute to its pre-2011 interpretation," said Senator Feinstein. "Many online gambling sites fail to screen for underage gamblers, do nothing to prevent money laundering and offer no recourse for fraud or other criminal acts. For most Americans, including children, gambling sites are only a few clicks away, and I believe Congress has a responsibility to prevent abuses from occurring."

U.S. Senator Kelly Ayotte (R-New Hampshire):
"With the stroke of a pen, the Justice Department in 2011 reversed decades of interpretation of the Wire Act - going around Congress and defying the plain text of the law. Since then, the Internet has become the ‘Wild West' of gambling, which presents a significant problem for law enforcement when it comes to shutting down illegal activity related to online gaming," said Senator Ayotte, who worked extensively on gambling issues during her time as New Hampshire's Attorney General. "This legislation restores the Wire Act so that there is authority to address crime that occurs with regard to Internet gambling, and the bill includes a provision to preserve the ability of traditional retail lottery sales by brick and mortar stores."

Congresswoman Tulsi Gabbard (D-Hawaii):
"Congress must fulfill its responsibility to debate this issue about how we approach online gaming regulations as a country. Until that debate occurs, we must restore the long-held interpretation of the Wire Act which bans online gaming. There are many concerns that have been raised by the FBI and state attorneys general, with regard to abuse and money laundering. The Internet Gambling Control Act of 2014 will restore protections against criminal activity and misuse of online gaming platforms to pre-2011 interpretation of the law. This affects states like Hawaii directly that prohibit any kind of gambling."



Why is the Legislation Needed?

• On December 23, 2011, the Department of Justice published an opinion that reversed the long-standing interpretation that the Wire Act banned all forms of Internet gambling.

• The Department of Justice found that the Wire Act only banned online sports betting. This decision opens the door to online gambling in states which previously have not allowed some forms of gaming.

• In the aftermath 3 states are currently offering some type of online gaming, and up to 10 additional states are currently considering doing the same.

• Courts have split on the legality of the Department of Justice's rulings. The 5th Circuit Court of Appeals has said the Wire Act only applies to sports betting while district level courts have said the Wire Act applies to all online gambling. The issue has not been before the Supreme Court.

What the Legislation Does

• The Graham-Chaffetz legislation simply returns the Wire Act to where it was in 2011 before the Department of Justice reinterpreted the long-standing statute.

• Traditional, retail store lottery sales will not be affected.

• Gaming establishments, in states where gaming was legal prior to 2011, will not be affected.