Laxalt describes ‘nuances’ in his position on Wire Act reform

Nevada Attorney General Adam Laxalt didn't back away from adding his name to a letter circulated by an attorneys general group offering support for federal efforts to restore the Interstate Wire Act back to its pre-2011 interpretation.

But the state's top prosecutor Tuesday outlined "some nuances in my own position."

Laxalt sent a separate letter to congressional leaders ahead of Wednesday's scheduled House Committee on Oversight and Government Reform hearing on the Wire Act legislation in Washington, D.C. The House bill and a similar bill in the Senate would effectively ban legalized gambling on the Internet and shut down Nevada's small, nearly 3-year-old online poker business.

The Republican attorney general still wants Congress to review the Wire Act, which was written in 1961 and covered the transmission of wagers. But lawmakers also must also account for "Nevada's robust regulated and licensed gaming manufacturing and casino resort economy."

Laxalt was criticized by Gov. Brian Sandoval, casino executives and gaming regulators, when he said before Thanksgiving that he would sign the attorneys general letter. Sandoval said Laxalt flew afoul of Nevada law that created the state's online poker network.

The U.S. Department of Justice, in a December 2011 opinion, concluded the Wire Act applied only to sports betting and not poker or casino-style games. The change opened the U.S. to legal Internet gaming. Nevada, Delaware and New Jersey all approved forms of online wagering.

Laxalt didn't address the legality of online gaming in his support letter, but disagreed with the Justice Department's process.

"The result ... was more akin to lawmaking than to legal interpretation by executive branch attorneys," Laxalt wrote. "The impact of this particular interpretation went far beyond the narrow effect that such an interpretation would ordinarily have."

The House and Senate bills would throw out the Justice Department's ruling. The legislation is backed by billionaire casino owner Sheldon Adelson, a prolific GOP campaign donor who has vowed to spend big money in an effort to wipe out Internet gambling. Adelson, chairman and CEO of Las Vegas Sands Corp., believes online wagering is corrosive to society and bad for the casino industry.

Laxalt said he agrees "with the spirit" of restoring the Wire Act.

But he also addressed concerns raised by the Association of Gaming Equipment Manufacturers. The Las Vegas-based trade group has said a restoration of the Wire Act could indirectly shut down modern systems and technology that rely on wire communications. The equipment is utilized by U.S.-based commercial and tribal casinos and the nation's lottery industry to manage properties, gaming activities and customer service.

Laxalt said lawmakers must account for and "protect current and future technology" that could deployed and are "central to the success of land-based casino resorts." He wrote that "it is critical that policymakers understand" that certain technology "should not be prohibited by an overly broad iteration of the Wire Act."

Eight state attorneys general signed on to the letter that was circulated by the group and was submitted to House committee. However, Laxalt's counterparts in New Jersey and Delaware did not add their names to the missive.

Laxalt offered an additional "point of clarification" to the AG's letter, which stated the Wire Act changes opened the door to money laundering and other nefarious activities. He credited Nevada's strict gaming regulatory structure with keeping those elements out of the Silver State and said he was "unaware of any evidence" to the contrary.

Laxalt hopes his letter quells some of the criticism.

But the hearing on Capitol Hill might add fuel the fire.

The House bill is sponsored by Rep. Jason Chaffetz, R-Utah, who is chairman of the Oversight Committee. South Carolina Attorney General Alan Wilson, who co-authored the support letter, and a high-ranking FBI official are two of the four witnesses scheduled for the hearing titled "A Casino in Every Smartphone."

The source of the hearing's title tells you what's in-store for the speakers.

When he launched the Coalition to Stop Internet Gambling in 2013, Adelson said, "It's common sense that putting a virtual casino in the pocket of every American with a smartphone is bad public policy."

The hearing is expected to examine "law enforcement implications" of the Wire Act's reinterpretation. The setting is likely to be hostile for witnesses who are Internet gaming proponents, including former Nevada Gaming Control Board Chairman Mark Lipparelli, who played a part in Nevada's online regulations.

Rep. Dina Titus, D-Las Vegas, said she plans on attending the hearing, but was hoping for a more "balanced" approach in examining online gaming.

"While I appreciate that the committee is holding a hearing on this important topic, the title suggests that it will be ideological and one-sided," Titus said.

Howard Stutz's Inside Gaming column appears Wednesdays and Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. Find on Twitter: @howardstutz