In January, 2019, the Department of Justice (DoJ)’s Office of Legal Counsel revealed plans to reverse the 2011 interpretation of the Wire Act, effectively seeking to suspend online gaming in all its forms. Shortly after, the intention became a reality. However, not everyone is keeping quiet about it.
The Wire Act’s Offensive Is Met by New Jersey and Pennsylvania
New Jersey and Pennsylvania’s attorney generals are not happy with the revised DoJ 2011 decision, effectively suspending all inter-state online gaming, and possibly impeding the progress of the industry in its entirety. In the case of New Jersey, it’s quite understandable.
By one estimate, the state spent nearly $8 million fighting another dogged federal ban, the Professional and Amateur Sports Protection Act of 1992, defeating it in May, 2018, and opening up the way for the sports betting industry in the United States.
On February 5, both New Jersey Attorney General Gurbir Grewal and Pennsylvania Attorney General Josh Shapiro explained that should the DoJ start applying the new decision, following the 90-day grace period, the online gaming and sports betting industries in both states could be severely weakened.
The intent to expand the Wire Act’s interpretation, superseding the 2011 ruling, was first outlined in an opinion back in November 2018. New Jersey’s Division of Gaming Enforcement has so far kept relatively quiet, although they don’t really give the look of lawmakers happy with the current developments.
You and Sheldon’s Army
Mr. Grewal and Shapiro didn’t mince their words when they issued the statement, arguing that after failing to fight a reversal of the Wire Act in Congress, the lobbyists hobnobbed with their people at the DoJ’s office.
“The Sands Chief Executive, Sheldon Adelson, established the Coalition to Stop Internet Gambling to lobby against the  opinion. But the coalition was unable to persuade Congress to amend the Wire Act, so certain lawmakers ‘pressed the [DOJ] on its interpretation of the act.”
Mr. Adelson’s involvement is far from secretive. He has openly invested hundreds of thousands of dollars in the GOP to cultivate important partnerships and pursue his long-term goal, i.e. winding down the online casino and sports betting industries.
After 8 years, he’s finally got something to show for that. The statement request goes to outline the possibly detrimental consequences for people and business:
This decision puts jobs and livelihoods at risk for the thousands of people who work in the online gaming industry and jeopardizes critical state funding for the public good that is generated by lottery sales and other internet activity that is legal within our states.
New Jersey and Pennsylvania have also placed a Freedom of Information Act (FOIA) request whereby they want to determine if the reversal has been a direct result of Mr. Adelson’s lobbying, which many know for a fact to be the case.
One of the Wire Act’s biggest spanners is the fact that it targets cross-state operations. Transfers of data are forbidden under the legislation, and that could have devastating effects for state lotteries and the poker shared-liquidity scheme New Jersey, Nevada and Delaware.