You might not hear anything about the US Department of Justice deciding to back off its latest Wire Act opinion. It will more than likely be a very quiet retreat.
But with the evidence mounting that the opinion came directly from a casino magnate and anti-online gambling zealot, and opposition to the opinion itself growing every day, the DOJ may soon have no choice but to drop the issue and distance itself from the whole mess.
The DOJ’s latest interpretation of the Wire Act reverses its 2011 opinion that the act only applies to sports betting. That 2011 opinion led states like New Jersey and Pennsylvania to believe it was OK to legalize online casino gambling in the US. Plus, several more states also used it to justify the launch of online lottery sales.
It’s unclear if DOJ prosecutors are going to bring any actions against the online gambling industry based on it. However, the opinion does suggest online gambling in most forms may be a federal crime. Even in the states that have made it legal.
The influence of Sheldon Adelson
The Wall Street Journal published an article in January suggesting the opinion looked a lot like the one contained in a memo sent to the DOJ in April 2017 by a lobbyist backed by Las Vegas Sands Corporation CEO Sheldon Adelson. Adelson is US online gambling’s biggest opponent. He has been lobbying to have the 2011 DOJ opinion reversed since it was released.
The Washington Post followed that up with an article published on Feb. 7. It contains comments from Washington attorney Charles Cooper, the Adelson-backed lobbyist who penned the memo. Not coincidentally, Cooper previously headed up the DOJ’s Office of Legal Counsel.
Cooper confirmed that he lobbied the DOJ to reconsider its 2011 Wire Act opinion. He appeared satisfied that his memo seemed to resonate so strongly with the current DOJ Office of Legal Counsel administration. Plus, he admitted the new opinion “accords entirely with the analysis my firm undertook and I shared with the DOJ.”
Famous last words
Justice Department officials immediately defended themselves. They claim the process of coming up with the new opinion was independent and in keeping with department norms and guidelines.
Justice Department spokeswoman Nicole Navas Oxman told the Washington Post the opinion reflects the Office of Legal Counsel’s “best judgment of the law.” Plus, the accusation that it may have been shaped by outside interests is “baseless and offensive.”
However, that may very well be the last thing Justice Department officials say on the subject.
Growing Wire Act opposition
Pennsylvania and New Jersey Attorney Generals Josh Shapiro and Gurbir S. Grewal wrote a letter to the DOJ on Feb. 5, asking that it withdraw the opinion. Or at the very least, the DOJ tell its prosecutors to refrain from doing anything with it.
Shapiro and Gurbir claim the opinion threatens hundreds of millions in revenue that online gambling and lottery sales are already generating. Plus, the DOJ is doing things contrary to its own policies by changing the opinion that created the industry in the first place.
They are not alone in their criticism.
The North American Association of State and Provincial Lotteries also sent a letter to the DOJ urging it to reconsider.
Plus, New Hampshire Lottery officials had threatened to pursue legal action if the DOJ tries to enforce the new interpretation of the law with regards to online lottery sales. As of today, they made those threats official and filed a lawsuit.
Plus, Maryland Congressman Jamie Raskin recently pressed acting US Attorney General Matthew Whitaker on Adelson’s role in crafting the new Wire Act opinion at a congressional hearing.
Better off backing off the Wire Act opinion
It’s to the point now where the DOJ would be better off simply walking away from the opinion. At least then it can hope the issue dies a quick death.
Standing behind it will only lead to more scrutiny. Increased scrutiny will only lead to more truth about the opinion’s origins being revealed. Plus, enforcement will just kick off lengthy court battles where the real truth is bound to surface eventually.
The last thing the DOJ wants is to have to spend the next few years defending itself against accusations Adelson and his cronies crafted the opinion, then bought and paid for the DOJ to make it their own.
So, don’t be surprised if all is quiet on the Wire Act front going forward. Until all this talk that online gambling is suddenly a federal crime simply fades away.