The top law enforcement officers for New Jersey and 26 other states on June 21 asked the Biden administration to rescind a Trump Department of Justice order that they said could threaten the survival of the online gambling industry.
In 2018, the DOJ proposed expanding the Wire Act – a 1965 federal law that barred many kinds of interstate gaming, at the time in a bid to clamp down on mafia activities – so that it would effectively ban any type of gambling that crossed state lines.
Opponents worried the move would heavily weaken the online gambling and sports betting markets in states like New Jersey, because aspects of online gaming – such as internet connection and payment processes – cross state lines, which would violate the Trump DOJ’s definition of the Wire Act.
Now 27 states are asking the Biden team to pull back that order.
Officials at the Justice Department could not immediately be reached for comment.
During COVID-19 pandemic business closures last year, online gambling and sports betting became a lifeboat for the New Jersey’s nine casinos. But even before those closures, online and mobile phone betting was surging in popularity.
New Jersey Attorney General Gurbir Grewal attends the South Asian Bar Association Annual Gala in Somerset on Sept. 18, 2019. – OFFICE OF THE ATTORNEY GENERAL / TIM LARSEN
“New Jersey’s legal gambling industry – and the many state services and programs supported by gaming revenue and tax dollars — would have been devastated in 2020 without online gaming,” New Jersey Attorney General Gurbir Grewal said in a June 21 statement.
“Internet gaming has for years been, and remains, an essential industry here, one the Department of Justice viewed since 2011 as perfectly legal until its baseless backtracking in 2018,” he said.
The DOJ’s ruling was ultimately struck down in June 2019 by U.S District Judge Paul Barbadoro, for the District of New Hampshire. Barbadoro, in his 63-page opinion, said that the DOJ’s interpretation was “bizarre” and “plagued” by “incoherence.” But the DOJ appealed in 2019, and the case has slowly trudged through the courts.
Grewal argued in various fillings over the past two years 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 [Las Vegas] Sands Chief Executive, Sheldon Adelson, established the Coalition to Stop Internet Gambling to lobby against the [2011] opinion,” reads a federal public record request filed jointly between Grewal and the Pennsylvania attorney general’s office in February 2019.
Former state Sen. Raymond Lesniak at the opening of sports betting at Monmouth Park on June 14, 2018. – NJBIZ/AARON HOUSTON
Adelson poured millions into the lobbying group the Coalition to Stop Internet Gambling, which has backed bills in Congress to curtail online gambling.
“We maintained from the start that the Trump-era Wire Act ‘reinterpretation’ was politically motivated and wrong on the law,” Grewal said on Monday.
Former state Sen. Ray Lesniak, a Democrat, who sponsored several bills over the years to legalize sports betting in New Jersey, including a successful statewide referendum in 2011, contended that this judicial back and forth would ultimately keep the online gaming markets in New Jersey and other states “in limbo” and uncertain on how to expand their internet operations.
