OXON HILL, Maryland – MGM National Harbor was not the appropriate venue for someone seeking a favorable view of the recent U.S. Department of Justice’s reinterpretation of the Federal Wire Act.
Mobile sports wagering – an active discussion topic during last week’s American Gaming Association-sponsored Sports Betting Executive Summit – could be curtailed if the 23-page opinion from the Department’s Office of Legal Counsel is allowed to stand.
The summit brought together high-level sports, broadcasting and gaming industry leaders for a day-and-a-half of discussions on legal, regulated sports betting expansion in the U.S.
The Wire Act reinterpretation, which would throw out a 2011 opinion and revert the Wire Act back to its 1961 view – one that prohibits certain types of betting businesses – was roundly criticized.
George Rover, center, at the sport betting summit (Photo via AGA)
“It reads like there was someone sitting in a law library who was given instructions to write an opinion that would have the wrong result,” George Rover, managing partner at Princeton Global Strategies and a former deputy director of the New Jersey Division of Gaming Enforcement, said.
Larry Breuer, a former head of the Justice Department’s criminal division and currently vice chairman of Covington & Burlington in Washington D.C., said the opinion “was a fight about grammar” in both the original Wire Act and the 2011 reinterpretation that opened the door for states to legalize online gaming and the sale of lottery tickets over the Internet.
“They spent pages and pages in a discussion of grammar,” Breuer said. “(But) this could have a very real impact on online lotteries and everything that launched after the (2011) opinion.”
Since the initial Wire Act reinterpretation was released, three states – Nevada, New Jersey, and Delaware – have opened Internet casino markets, with Pennsylvania expected to launch its own this year after legalizing the activity in 2018. Six states have online lottery operations – New Hampshire, Pennsylvania, Georgia, Kentucky, Illinois, and Michigan.
Last May, the Supreme Court threw out the Professional and Amateur Sports Protection Act, opening the U.S. to legal sports betting. Seven states have since opened sportsbooks at casinos and racetracks, and nearly two dozen other states are in various stages of sports betting legislation. Nevada and New Jersey have active mobile sports wagering businesses, while Mississippi offers mobile betting but restricts it to patrons that are already at casinos. Other states are considering the Nevada-New Jersey model.
The Wire Act reinterpretation was announced in mid-January, but the opinion was dated Nov. 2, 2018, a week before Attorney General Jeff Sessions resigned. The Attorney General’s office has twice delayed implementation until mid-June. New Hampshire filed a federal lawsuit against the opinion in February, an action supported by more than a dozen other states.
Breuer, who was critical of the 2011 and 2018 Wire Act reinterpretations, said the Justice Department, now headed by Attorney General William Barr, should not make the Wire Act a priority.
“In normal times, the Justice Department would be unlikely to prosecute businesses that comply with state gambling laws, but we’re not in normal times,” Breuer said. “It’s hard to predict what the DOJ will do, but I know (William) Barr and I would be surprised if the DOJ brings cases against businesses using state laws.”
Ex-New Jersey Governor Chris Christie answers questions at a press conference (Photo via AGA)
Former New Jersey Gov. Chris Christie, a keynote speaker at the summit, said he didn’t believe Barr would make the Wire Act “a prosecutorial priority.”
In a press conference following his remarks, Christie added that Barr would probably relook at the opinion, make his own judgement, “and not rely on what Jeff Sessions did.”
New Jersey launched Internet gaming under Christie. The activity generates $352.7 million in annual revenue and $60 million in gaming taxes, according to the state’s attorney general.
“I don’t know why (the Wire Act) should be a priority of the Justice Department when we’re in the midst of an opioid crisis and a whole other number of issues that we think are very important,” Christie said. “We need to keep the homeland safe.”
Christie, a former U.S. Attorney in New Jersey under President George W. Bush, said the Attorney General “is not subtle” when the Justice Department wants action. Until Barr decides has the Wire Act will be handled, he said, the gaming industry shouldn’t over-react.
“My point if this that if this became a priority, we would all know that very clearly,” Christie said. “Until we something like that happens, I’m not going to lay awake at night worrying about the new interpretation of the Wire Act.”
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
