MGM Resorts International Chairman and CEO Jim Murren called the U.S. Department of Justice’s reconsideration of the Federal Wire Act “perplexing” and a “poorly written” decision on Wednesday.
And, Murren added the gaming industry believes the opinion is “unenforceable.”
Murren’s comments – the most strongly-worded public statement made by a casino industry official on the Wire Act changes – came toward the end of the company’s fourth quarter earnings conference call.
Union Gaming Group analyst John DeCree asked Murren his thoughts about the new Wire Act interpretation, which erased a 2011 Justice Department opinion that helped create online gaming operations in the U.S. and allowed for other gaming industry technology advances.
“This latest missive from the DOJ is perplexing is an understatement,” Murren said. “It’s just, we think, an absurdly poorly written and unenforceable opinion, and I don’t think anyone in the industry, the gaming industry, the sports betting industry, feels any differently.”
The 23-page opinion from the Department’s Office of Legal Counsel would apply the Wire Act, which was written in 1961, to any form of gambling that crosses state lines, including online gaming.
For now, it’s unclear how the new Wire Act interpretation will ultimately impact gaming operations throughout the country. Deputy Attorney General Rod Rosenstein issued a memorandum in January delaying implementation of the opinion for 90 days while the Justice Department decides how it will handle any Wire Act prosecutions.
Murren’s sentiments mirrored those of multiple law firms with specialized gaming practices have weighed in. Some believe the new opinion is over-reaching and could wipe out many of the technological advancements utilized in the last seven years: any situation, for instance, where gaming information is transmitted over the Internet.
Some activities that could be outlawed under the ban, according to experts, include online gambling activities in three states, the sale of lottery tickets over the Internet, and, potentially, mobile sports wagering, among other activities.
“If reads as words, it would mean that Powerball, as it exists in 44 states in the U.S., isn’t legal anymore,” Murren said.
The revision to the Wire Act was pushed by lobbyists for Las Vegas Sands Corp., and company Chairman and CEO Sheldon Adelson.
A firm headed by Washington D.C. attorney Charles Cooper, who has worked for the Adelson-backed Coalition to Stop Internet Gambling, wrote a detailed memo outlining changes to the Wire Act, which reached the Justice Department’s Office of Legal Counsel in 2017. Cooper told the Washington Post last week the decision “accords entirely with the analysis my firm undertook and I shared with the DOJ.”
Murren didn’t mention Las Vegas Sands’ involvement during the call.
MGM Resorts is been expanding its interactive business interests in the past year, mainly through the legalization of sport betting.
Last summer, the company entered into a 50-50 joint venture partnership with UK-based GVC Holdings to create a U.S.-based sports wagering and online gambling platform. MGM also struck sports wagering partnership deals with the National Basketball Association, Major League Baseball and the National Hockey League.
“From our perspective at MGM, we view sports betting as a larger opportunity than simply betting on sports,” Murren said. “We look at it as a total interactive experience.”
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
