A federal judge Monday blocked a proposal from the Trump administration which opponents worried would jeopardize New Jersey’s multi-billion dollar gambling industry.
U.S. District Judge Paul Barbadoro, in a 61-page decision, struck down the U.S. Department of Justice’s strict interpretation of the Wire Act, ruling it only applied to sports betting, and not in-state online gambling and lotteries.
Last year the DOJ proposed expanding the Wire Act in such a way that would ban any online gambling that crosses state lines.
Opponents worried the move could heavily weaken the state’s online gambling and sports betting markets because aspects of online gaming, such as internet connection and payment processes, cross state lines, which alone could violate the newly defined Wire Act.
“The future of New Jersey’s online gaming industry is at stake because of DOJ’s unlawful about-face regarding internet gaming – an activity that DOJ promised us was perfectly legal just eight years ago,” Attorney General Gurbir Grewal said in March. “We will not stand by and let this arbitrary, politically-driven reinterpretation destroy a vibrant and essential industry here in our state.”
The Trump ruling aimed to reverse an Obama-era 2011 ruling that allowed for online gambling, ultimately paving the way for the New Jersey’s gambling industry to vastly expand its operations.
Many state agencies relied on that earlier ruling and “have openly engaged for many years in conduct” that the DOJ “now brands as criminal” and “had to confront a sudden about-face,” Barbadoro said.
The suit, brought by the New Hampshire Lottery Commission, worried the move could jeopardize the Powerball and state lotteries elsewhere.
Grewal, who intervened in the New Hampshire suit, contended that the justice department’s decision was done at the backing of Las Vegas Sands Chief Executive Sheldon Adelson, a powerful casino lobbyist and Republican party mega-donor.
The New Jersey Attorney General filed a Freedom of Information Act request in February seeking documents from the justice department which might indicate the role Adelson played in crafting the reinterpretation, but the request was denied.
“The [Las Vegas] Sands Chief Executive, Sheldon Adelson, established the Coalition to Stop Internet Gambling to lobby against the  opinion,” reads the FOIA request filed jointly between Grewal and the Pennsylvania attorney general’s office.
“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’,” the request continues.