Online gaming in New Jersey has become a billion-dollar industry, and state officials are concerned the federal government’s recent interpretation of the Wire Act could put revenue, jobs and the future of Atlantic City in jeopardy.
Senate President Steve Sweeney, D-Salem, Gloucester, Cumberland, wrote a letter to U.S. Deputy Attorney General Rod Rosenstein on Wednesday requesting a withdrawal of the Department of Justice’s opinion on the Wire Act.
The most recent opinion of the Wire Act, released in January, suggests the law applies to all forms of online gambling, including casino games, sports betting and lottery, and is in direct contrast to a 2011 Justice Department opinion that the New Jersey Legislature relied on before legalizing internet wagering in 2013.
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“This legislation has generated more than ($1 billion) for our then-struggling casino industry and hundreds of millions of revenue, directly and indirectly, for our Treasury, brought back thousands of jobs and saved thousands more,” Sweeney wrote. “The goal of our internet wagering law, as stated by its Senate sponsor Raymond Lesniak, was to revitalize Atlantic City’s struggling casino industry, which had lost 15,000 jobs, and to make New Jersey a national and international hub for internet gaming.”
Lesniak said he is prepared to take this fight to the courts if need be. Lesniak, who left the state Senate in 2018, has been authorized by Sweeney to respond to the DOJ opinion on behalf of New Jersey and file suit in U.S. District Court if necessary. He said he would wait 30 days to allow recently confirmed U.S. Attorney General William Barr to take an “honest look” at the opinion before moving ahead with potential legal action.
“Internet gaming is an important revenue source for casinos that allows them to stay open and expand to other attractions,” Lesniak said.
Lesniak has also filed a Freedom of Information Act request to determine who lobbied the DOJ to rewrite the Wire Act opinion. The former state senator is of the belief — as are others, according to a report by The Washington Post — that Las Vegas Sands Corp. CEO Sheldon Adelson — a billionaire Republican campaign donor, close ally of President Donald Trump and vocal opponent of online gaming — had an influence on the decision.
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“I don’t like to believe that the Justice Department is political, but I learned in politics that you should assume no coincidences,” he said.
New Jersey Attorney General Gurbir Grewal and Pennsylvania Attorney General Josh Shapiro wrote a joint letter to Rosenstein and former acting U.S. Attorney General Matthew Whitaker on Feb. 5 expressing their “strong objections” to the recent opinion.
Grewal took the additional step of filing his own FOIA request for communications between Adelson, his lobbyists, the White House and DOJ regarding the Wire Act opinion.
“Since 2013, New Jersey has worked hard to keep its online betting in state, where it is lawful, and to prevent it from occurring in other states, where it is not,” the Feb. 5 joint letter from the state attorney general said. “That industry now generates $352.7 million in annual revenue and $60 million in direct gaming taxes — key both to New Jersey and to Atlantic City’s vitality.”
Sweeney said the opinion “has already caused harm to the State of New Jersey,” noting that the Pennsylvania Gaming Control Board pulled back on a plan to place its internet gaming equipment in Atlantic City over concerns it was not consistent with federal law.
Sweeney continued that the 2019 opinion “flies in the face” of the 2011 interpretation. He went on to state that the recent opinion was 26 pages of “tortured analysis of sentence structure and comma placements” to interpret the “clear language” of the Wire Act, which Sweeney believes runs counter to a 5th Circuit Court of Appeals opinion and a “thorough review” by the Justice Department in 2011.
The Interstate Wire Act is a 1961 federal law that sought to make interstate gambling illegal to curtail organized crime’s influence over the industry. The 2011 DOJ opinion was the result of bipartisan pressure in the U.S. Senate to curtail all forms of internet gambling. But the push backfired and the DOJ opined in 2011 that the Wire Act applied only to sports.
On Friday, the New Hampshire Lottery Commission filed suit against the DOJ in a federal court seeking a summary judgment of the Wire Act opinion.