The American Gaming Association on Friday criticized the U.S. Department of Justice for reinterpreting its 2011 decision concerning the Federal Wire Act, saying the government agency “departed from well-established practice in reversing its previous opinion without a compelling reason to do so.”
However, AGA Senior Vice President of Public Affairs Sara Slane said the ruling “does not impact the ability for states and Tribes to legalize and regulate gaming on a state-by-state and tribal basis.”
On Monday, the Justice Department released a 23-page opinion from the Office of Legal Counsel that reverted to the original interpretation of the Wire Act, the 1961 law that prohibits certain types of betting businesses in the United States.
The December 2011 opinion said the Act pertained only to sports betting. The new decision, dated Nov. 2, threw out the seven-year-old ruling and added back in other forms of online gaming, including Internet wagering and the sale of lottery tickets over the Internet.
The news sent shock waves through the U.S. Internet gaming market, which launched soon after the 2011 Wire Act ruling. Gaming lawyers said the implications of the new ruling were confusing and the matter would ultimately be decided in a federal court room.
Deputy Attorney General Rod Rosenstein on Tuesday issued a memorandum to delay implementation of the opinion for 90 days.
Slane said the Washington D.C.-based AGA would encourage the Department of Justice “to investigate and shut down illegal, unregulated gambling operators who prey on consumers.”
Slane said, “With over 4,000 regulators and billions of dollars allocated to compliance, casino gaming is one of the most highly regulated industries in the country.”
Gaming industry representatives universally criticized the decision as reckless, but the outcome remains in question.
“Legally, the decision was not ambiguous,” Las Vegas gaming attorney Kate Lowenhar-Fisher of Dickinson Wright said Tuesday. “It was a tortured effort to interpret the Wire Act to include all forms of betting. It was an absurd grammatical exercise.”
Anti-Internet gaming advocates, however, including an organization supported by Las Vegas Sands Chairman and CEO Sheldon Adelson – who vowed years ago to spend “whatever it takes” to kill the activity – cheered the DOJ ruling.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
