Wire Act opinion unpopular in gambling states

Gambling States And Stakeholders Join Chorus Of Opposition To Wire Act Opinion

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The US Department of Justice unleashed a cloud of uncertainty in December when it published a reinterpretation of the 1961 Wire Act and its applicability to online gambling. The new opinion rescinded the one from 2011, which had limited the scope of the federal law to sports betting.

Like most things, though, the devil is in the details.

How the DOJ intends to enforce its new, highly controversial interpretation is unclear at this time. The ambiguous opinion has created more questions than answers for states with legal online gambling.

  • Lenient enforcement would see the DOJ target illegal offshore operators, while leaving state-regulated online gambling alone.
  • Measured enforcement would limit the new opinion to interstate gambling activities, like the multi-state online poker agreement that comprises Delaware, Nevada, and New Jersey.
  • Strict enforcement would put online gambling, lotteries, and pari-mutuel horse betting in jeopardy in multiple states.

States with gaming revenues at risk aren’t waiting around to find out how the DOJ intends to enforce the new opinion.

As was the case with past legislative efforts to institute a federal online gambling prohibition, the DOJ opinion is proving highly unpopular. More and more stakeholders are beginning to speak out against it.

Four states (and counting) push back

Key individuals in four states — Pennsylvania, New Jersey, Massachusetts, and New Hampshire — are already pushing back against the new opinion. And several others would likely join their cause if the DOJ tries to enforce the new opinion strictly.

Pennsylvania and New Jersey joint AG letter

The attorneys general of two large gambling states in the East penned a joint letter to the DOJ expressing objection to the new opinion.

In the February 5 letter, AGs Gurbir S. Grewal (NJ) and Josh Shapiro (PA) bluntly stated:

“DOJ’s latest reversal is wrong, and it undermines the values of federalism and reliance that our states count on. We request that you withdraw the OLC opinion or, in the alternative, guarantee that DOJ will not bring enforcement actions against companies in our states that are acting lawfully under state statutes.”

New Hampshire threatens legal challenge

New Hampshire is also threatening to pursue legal remedies should the DOJ try to revoke their successful online lottery.

Here’s Charles McIntyre, the executive director for the NH Lottery, speaking to the Union Leader:

“Certainly at the very narrowest interpretation we are looking at $4 million to $6 million this year and $6 million to $8 million next year, as this represents what we are selling now through the internet online channel.”

Massachusetts Treasurer exploring her options

Massachusetts Treasurer Deborah Goldberg is pushing state lawmakers to authorize online lottery.

According to State House News Service (paywall), Goldberg is working with Attorney General Maura Healey and plans to meet with members of the Massachusetts Congressional delegation.

Here’s Goldberg:

“This issue will be part of our discussions with the Legislature as they tackle sports betting and online lottery this session. We are taking a proactive approach and working with the Attorney General’s office and meeting with congressional members during the NAST Legislative Conference to address the implications of this opinion.”

Lottery group attacks Wire Act opinion, too

The North American Association of State and Provincial Lotteries (NASPL) has also voiced opposition to the new opinion.

“The recent United States Department of Justice, (DOJ) reinterpretation of the Wire Act of 1961 creates a substantially detrimental impact on the lottery industry, including traditional retail-based draw and instant lottery games, as well as traditional lottery games offered over the Internet, and the billions of dollars for good causes lotteries provide,” the NASPL statement reads, in part.

Here’s more:

”DOJ’s reinterpretation of the Wire Act creates substantial uncertainty concerning the legal status of lottery transactions, including these critical enhancements and improvements, many of which were made in reliance on the 2011 opinion, and the related contractual obligations and the industry’s ability to provide critically needed funding for important public interests.”

AG Whitaker questioned by Congress

And then there were the pointed questions from Rep. Jamie Raskin (R-MD) to acting US Attorney General Matthew Whitaker at a recent congressional hearing.

Raskin bluntly interrogated Whittaker about his ties to Sheldon Adelson. He questioned if Adelson — as the Washington Post reported — had a hand in crafting the new Wire Act opinion.

“I’ve got a theory I want to float with you. It goes to something very strange that’s been happening at the Department of Justice recently.

“Casino billionaire and magnate Sheldon Adelson hates online gambling, for obvious reasons. That’s competition for him. He wants people in the casino, not online, and he spent more than a million dollars lobbying Congress to override a 2000 [sic] opinion by the Office of Legal Counsel saying that The Wire Act plainly prohibits sports gambling online…”

Raskin then outlined the failed attempts (believed to be spearheaded by Adelson) to legislate an online gambling prohibition. With no path available, Raskin believes Adelson shifted his focus toward getting the 2011 DOJ opinion overturned.

Here’s more from the Congressman:

“And when Donald Trump won and Mr. [Jeff] Sessions became attorney general and you became [his] chief of staff, DOJ leadership ordered a reevaluation of this legal question. And what do you know? The Office of Legal Counsel finds some subtle and invisible points of law that apparently escaped the Department of Justice in 2011, and reversed the plain reading of the interpretation which talked specifically about sports betting.”

Whitaker denied meeting Adelson or speaking to lobbyists about the Wire Act, and openly rejected the premise of Raskin’s questions.

- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.
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