The following is an edited transcript
of a panel discussion held at Smart-
Tech in New York City on April 2. Due
to the sensitive nature of the discus-
sion, and the fact that the comments
are edited liberally and not verbatim,
the names have been redacted from
the transcript.
Moderator:
Scott Bowen
, Commissioner, Michigan Lottery
Panelists:
Scott Gunn
, Senior Vice President,
Global Government Relations, GTECH
Mark Hichar
, Partner, Chair of Gaming Law
Practice Group, Hinckley, Allen Law Firm
Kevin Mullally
, Vice-President of
Government Relations & General Counsel,
Gaming Laboratories International (GLI)
Lynne Roiter
, Secretary General, Vice President
Legal Group, Loto-Quebec, and General
Secretary of the World Lottery Association (WLA)
Philip Smith
, Director of Legal Services,
Missouri Lottery
Philippe Vlaemminck
, Partner, Altius Law Firm,
Legal Counsel to the European Lotteries
The Regulatory Front
What is the current status of the fight for
U.S. states to preserve the right to control
Internet regulatory policy, over against
federal intrusion into the regulation of
i-gaming and i-lottery?
•
We are in a battle to preserve the future of the lot-
tery industry. And it’s not just about the right to sell
lottery products over the internet lottery. It’s about
the power of different industry sectors to lobby for
regulations that divert economic proceeds from the
public sector, i.e. the Good Causes supported by
Lottery, over to private interests, i.e. commercial
casino and i-gaming operators. And now, commer-
cial gambling operators are not only lobbying for
laws that allow them to expand their businesses.
They see Lottery as a threat and so are lobbying the
U.S. Congress to pass laws that impair the ability
of lotteries to expand their businesses, or even to
meet the basic needs of the lottery consumer. Bills
are being proposed at the federal level that prohibit
lotteries from selling online. The potential for fed-
eral laws to tip the competitive landscape to favor
commercial interests over state lotteries poses a
very real threat.
•
In December of 2012, The U.S. Department of Jus-
tice (USDoJ) issued a statement clarifying that the
Wire Wager Act of 1963 applies only to sports-bet-
ting. Prior to this USDoJ clarification, nobody was
clear on whether the prohibition to transact bet-
ting over the “Wire” (electronic communications
which now include the internet) applied to forms
of betting other than sports betting. Lobbyists for
certain commercial interests, most notably Sheldon
Adelson, multi-billionaire chairman of Las Vegas
Sands, are now contending that the original intent
of the Wire Act was that it applies to all forms of
wagering, and therefore prohibits internet transac-
tions for all games of chance, including lottery. In
effect, these lobbyists are pressing the U.S. Con-
gress to countermand the USDoJ judgment that the
Wire Act applies only to sports-betting. Of course,
the USDoJ does not create law—it is tasked with
enforcing the laws that Congress creates. As the
legislative branch of government, Congress does
have the power to redirect the law or change the
way that the USDoJ interprets the law. Bills are be-
ing filed in the U.S. Congress by Senator Graham
from South Carolina and Representative Chaffetz
from Utah that purport to bring the Wire Wager Act
back to what the proponents are claiming was the
original intent. Not surprisingly, these bills include
carve-outs for areas that favor the interests of the
casino operators who want to offer i-poker; and
include provisions that would constrain Lottery’s
ability to sell lottery tickets online.
•
Most of us in this room today agree with the US-
DoJ clarification and contend that the Wire Act
was only ever intended to apply to sports-betting,
especially in light of the fact that the internet
and the current spate of i-gaming products did
not even exist when the Wire Act was introduced
back in 1963. Further, these commercial lobby-
ists are trying to twist the meaning and intent of
the UIGEA (Unlawful Internet Gaming Enforce-
ment Act) to be that it prohibits i-gaming. The UI-
GEA was, and continues to be, exactly as its name
States vs. Federal Government
Who determines Regulatory Policy in the U.S.?
Public Gaming International • September/October 2014
30
