If the U.S. Congress passes Restore America’s Wire Act (RAWA), it could set back the American brick-and-mortar casino industry 20 to 25 years. Slot machines linked over wide-area networks on the information cloud might be illegal, if RAWA were passed.
That is the contention of Russ F. Marsden, an UNLV gaming lawyer.Marsden contends that RAWA would make it illegal for a whole variety of Las Vegas casinos’ slot machines to operate.
Most electronic gaming machines (EGMs) exchange packets of information using cloud services. These cloud services often exchange information across state lines, which would be illegal under a stricter interpretation of Restore America’s Wire Act.
RAWA Might Make Progressive Slots Illegal
For certain, slot machines with progressive jackpots that are linked over a wide-area network would be illegal. Even progressive slots in a local area network might be illegal, if they use cloud services to store information. The information cloud is a network of online servers, gaining power through networking. Often, the cloud network exists in multiple US states.
In short, if the land-based casino industry pushes through Restore America’s Wire Act, it is going to hamstring its most lucrative forms of gambling. Slot machine jackpots would need to regress back to the technologies which handled the industry 20 to 25 years ago. Wide-area progressive jackpots almost certainly would be illegal, in the opinion of Russ Marsden.
Russ Marsden concluded that passing RAWA would put in danger a whole category of land-based casino games, including slot machines. Marsden wrote, “It is clear that RAWA would apply to any and all communications that use any portion of the Internet. Put differently, the wording of RAWA means that any use of any portion of the Internet, no matter how apparently small in geographic terms such as between intrastate locations, would be covered.”
Restore America’s Wire Act: Cloud Killer?
In a summary of his report, Marsden wrote, “RAWA would force all legal land-based casinos, including tribal casinos and traditional commercial casinos, into a technological backwater that would be functionally equivalent to networking technology as it existed approximately 20–25 years ago.”
“Put differently, RAWA would force legal land-based casinos back into the pre-Internet era and would freeze them in an obsolescent technological time warp. Land-based casinos would be unable to adapt to new and evolving technologies. Eventually, this technical stagnation would lead to financial stagnation.”
Those interested in reading Russ Marsden’s interpretation of RAWA should read “Restore America’s Wire Act: Cloud Killer?“. The paper makes a convincing argument that the language of the 1961 Wire Act is insufficient for a 21st century law. Any reference to restoring a law from the 1960s naturally would have numerous unintended consequences. Since Restore America’s Wire Act or its successor in the US Congress refers back to UIGEA — which refers back to the Wire Act — the language of the law would be imprecise by its very nature.
What Is Restore America’s Wire Act?
Restore America’s Wire Act is an obvious threat to the US online gambling industry. The legislation purports to establish the original interpretation of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).
The UIGEA made any online or mobile gaming illegal under US federal law, if the 1961 Wire Act made that same broad type of gambling activity illegal over the phone lines. The US Congress passed the Wire Act in 1961 in order to make sports bets over the telephone lines illegal. The federal government claimed the right, based on the idea the telecommunications infrastructure goes over state lines.
Why Does the Wire Act Exist?
Prosecutors used the Wire Act to prosecute members of organized crime over the decades, because their illegal sports betting operations were easier to prove than other crimes. No one could make casino bets or poker bets over the phone lines, so the Wire Act never led to prosecutions of casinos or poker game organizers.
When the Internet became mainstream in the 1990s, some of the first websites offered gambling. Until 2006, online casinos, card rooms, and sportsbooks existed in a legal gray area. They were unregulated, but not banned.
What Is the UIGEA Anti-Online Gambling Law?
The UIGEA changed all that. On December 31, 2006, UIGEA went into effect. The US Department of Justice in the Bush administration interpreted UIGEA to mean all forms of online gambling. So did Eric Holder’s Justice Department in the early Obama years, until the attorney generals of Illinois and New York asked for a clarification in late-2011. The US Department of Justice rendered an opinion, stating that online casinos and poker sites were not illegal, because the DOJ never prosecuted such activities under the 1961 Wire Act. Suddenly, several forms of online gambling was legal in the United States.
Under the new interpretation, an individual state had to legalize online poker and casino games first. Throughout 2012 and 2013, several state legislatures passed laws to do so. In 2013, Delaware, Nevada, and New Jersey legalized online gambling websites, if they had a licenses. Licenses were tied to land-based casino licenses.
Technology Laws Written by Tech Newbies
“Restore America’s Wire Act: Cloud Killer?” shows the dangers of having people who are not tech-savvy writes law for a technology-based industry. Sen. Lindsey Graham of South Carolina introduced and sponsored Restore America’s Wire Act to the US Senate in 2014, while former Rep. Jason Chaffetz of Utah introduced RAWA to the US House of Representatives.
Lindsey Graham is famous for the fact he seldom uses the Internet, and hardly uses his smartphone for more than making phone calls. Despite that fact, Sen. Graham sits on the Judiciary Committee’s sub-committee on Privacy, Technology, and Law. He helped write RAWA, but has only the vaguest of ideas how technology works in the gambling industry.
Marsden pointed out that fact in his criticism of the anti-online gambling bill. He noted, “RAWA may have damaging technical consequences for legal land-based casinos. That RAWA’s retrograde technical consequences may be unintentional appears to be supported by the fact that the bill’s primary advocates come from non-technical backgrounds.”
RAWA Would Undermine Advancements in Gaming Technology
In his report on RAWA’s impact, Russ Marsden discusses the baleful effects the bill would have on America’s gambling industry. He wrote, “RAWA would also kill emerging opportunities. For example, RAWA would prohibit the ability to monetize multiplayer online games, such as where game tournaments enable top players to play against each other while spectators make bets on the outcomes (esports).”
“Think of all the other opportunities that are not yet known and that may originate from other online sources of entertainment. RAWA eliminates all these potentialities. For all of the reasons discussed in this article, passing RAWA would be very damaging to the land-based casino industry.”
In a brick-and-mortar casino industry which is embracing eSports, virtual sports, skill-based slot machines, mobile tablet gambling at airports, and other technologically-advanced forms of betting, having a law that makes cloud computing illegal would have a withering effect. Those in the land-based casino industry who push Restore America’s Wire Act could cost themselves vast amounts of money, by making their top moneymakers’ illegal.
