New Jersey AG Suing The DOJ Over Wire Act

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Who knows if the Department Of Justice will ever tell the truth about where its latest Wire Act opinion came from? Let’s be thankful there’s still someone willing to push the Department to admit what really happened.

That someone is New Jersey Attorney General Gurbir Grewal, who filed a lawsuit against the DOJ this month. The lawsuit alleges the DOJ violated the Freedom of Information Act by failing to provide answers in response to New Jersey’s demand for any documents linking its new Wire Act opinion to Adelson’s lobbying efforts.

But let’s back up a minute.

Prior to 2011, online gambling was a gray market that only offshore operators dared to tread. Then, in the spring of 2011, the DOJ shut down the largest offshore operators in the online poker sphere. That sent a clear message: In the DOJ’s opinion, that market was a lot more black than gray.

Fast-forward to the fall of 2011, where the DOJ was suddenly waffling and states started taking that as a sign they had the right to launch legal online gambling markets of their own.

Wire Act opinions giveth and taketh away

The DOJ issued the opinion that the Wire Act applies only to sports betting. This initially opened the door for various state lotteries to launch online sales. But it also gave several states the idea they could legalize online gambling without interference from the feds. At least in fenced-in markets.

New Jersey was among them.

It may seem strange since he founded and still runs one of the largest casino companies on the planet. However, Las Vegas Sands Corporation CEO Sheldon Adelson stood in moral opposition to the idea.

Perhaps Adelson didn’t listen to advisers who said consumers would have better protection in a legal market. Perhaps he didn’t trust advisers who said online casinos would not eat away at the brick-and-mortar casino business as some feared.

Either way, he cried foul, claiming widespread online gambling puts children and anyone who has had a few too many adult beverages at risk.

Next, Adelson reportedly dumped thousands into lobbying groups to get the opinion reversed. Plus, millions more then (and over the years) into various Republican party campaigns he hoped would back that plan. It was largely ineffective.

Over the next few years, online gambling spread ever so slowly in the US. Then, practically on the eve of the largest state yet going live with legal online gambling, the DOJ suddenly changed its mind.

Only weeks before Pennsylvania would be ready to launch online gambling, the DOJ reversed its 2011 Wire Act opinion. It issued a new one claiming the act applies to all forms of online gambling.

Just who’s opinion is this?

The Wall Street Journal soon published an article suggesting this new opinion is the very same one an Adelson-backed lobbyist sent the DOJ a few years prior. Then, the Washington Post got that lobbyist to confirm it looked a lot like the one he penned.

DOJ officials issued a statement. They said any accusations the opinion was shaped by outside interests are “baseless and offensive.

Then, the New Hampshire Lottery Commission sued to try to get this new opinion reversed. The DOJ’s next moves were all about trying to avoid having any details about the opinion come out in open court.

Around the same time, Grewal stepped up to the plate.

Grewal and Pennsylvania Attorney General Josh Shapiro wrote a letter to acting US Attorney General Matthew Whittaker and Deputy Attorney General Rod Rosenstein stating strong objections to the new opinion.

Grewal even went as far as filing a Freedom of Information Act request. He said it was an effort to determine how much influence lobbying groups like the Coalition to Stop Internet Gambling and anti-online gambling zealots, like Adelson, had in creating the opinion.

The DOJ apparently figured ignoring the request would be its best strategy. Now, Grewal is suing.

It’s a bold move that should be applauded by those who think governments are required to tell people the truth, including who is writing the law and various interpretations of it.

Plus, it’s the kind of action that should be lauded by anyone who thinks Americans have the right to do whatever they want in the privacy of their own homes. Just as long as it doesn’t infringe upon the rights of others.

New Jersey has a right to know

In a statement, Grewal maintains that the people of New Jersey have a right to know:

“Online gaming is an important part of New Jersey’s economy, and the residents of New Jersey deserve to know why the Justice Department is threatening to come after an industry we legalized years ago. It’s especially important that we figure out whether this federal crackdown is the result of a lobbying campaign by a single individual seeking to protect his personal business interests.”

Grewal says the DOJ confirmed it had received New Jersey’s request in March and would expedite processing. Since then, he hasn’t heard a peep.

The DOJ has given US online gambling operators and the states they call home a June 14 deadline. After that, The DOJ will reportedly force these entities to comply with its new interpretation of the law.

Who knows what exactly will happen after June 14. The DOJ could presumably start prosecuting those that don’t comply with its new Wire Act opinion.

If that does happen, at least we know now someone is willing to ask whose bright idea this one is.

Martin Derbyshire

About

Martin Derbyshire has more than ten years of experience reporting on the poker, online gambling, and land-based casino industries for a variety of publications including Bluff Magazine, PokerNews, and PokerListings. He has traveled extensively, attending tournaments and interviewing major players in the gambling world.

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