Members of the New Jersey congressional delegation, including Democratic Senators Bob Menendez and Cory Booker, are calling on Deputy Attorney General Rod Rosenstein and the Department of Justice (DOJ) to uphold a 2011 opinion on the Wire Act that will allow their state’s legalized online gambling market to continue unimpeded.
A 2011 DOJ opinion said the Wire Act bans the interstate transmissions of wire communications for sporting events, but not necessarily other forms of gambling activities. The landmark opinion paved the way for internet casinos.
In New Jersey, online casinos are playing a critical role in the revitalization of Atlantic City. Menendez and Booker, along with three Republicans and five Democrat US Representatives representing the Garden State, want to make sure the 2011 opinion remains intact.
Atlantic City’s land-based casino win was up just 0.3 percent in 2017. But with online revenues included, which were up 25 percent last year, the seven remaining casinos saw their overall total gaming wins climb more than seven percent.
“This growth in revenue is in large part due to significant capital investments by the state in online gaming facilities, equipment, and technology that makes online gaming safe and secure,” the legislative letter to Rosenstein declared.
“Placing a blanket prohibition for online gambling would be an antiquated approach to a 21st century issue. We respectfully request that you uphold the 2011 decision that the Wire Act does not prohibit online gambling,” the congressional delegation petitioned.
Walking the Wire
It’s now been more than six years since a DOJ ruling on the Wire Act was made public in December 2011. In response to an inquiry from lawmakers in Illinois and New York who requested clarification on the legality of their respective states selling lottery tickets through online channels, then Assistant Attorney General Virginia Seitz explained that the Wire Act does not prohibit such transactions.
In the department’s 13-page opinion, the Justice Department said the Act applied only to sports betting, and not general gambling. Seitz also determined that the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), which made it illegal for payment processors to facilitate deposits and withdrawals relating to internet gambling, had no bearing influence on the matter.
“We need not consider how to reconcile the Wire Act with UIGEA, because the Wire Act does not apply in this situation,” Seitz stated. “We express no view about the proper interpretation or scope of UIGEA.”
The opinion has been at the center of much political debate in Washington ever since. Senator Lindsey Graham (R-South Carolina) and former Rep. Jason Chaffetz (R-Utah) introduced the Restoration of America’s Wire Act (RAWA) into their respective chambers in both 2015 and 2016.
On the Other Hand
The nearly identical pieces of legislation, thought to have been strongly pushed for by billionaire Las Vegas Sands owner Sheldon Adelson, never reached a floor vote. That led Graham into taking a new course of action last fall. The longtime congressman sent Rosenstein, along with cosigner Sen. Dianne Feinstein (D-California), his own Wire Act letter in November, requesting that the 2011 decision be reconsidered.
Graham and Feinstein argued that online gambling preys on children and society’s most vulnerable individuals, a stand that mirrors Adelson’s pretty much to a T.
To date, there’s no response out of Washington as to whether Rosenstein might review the opinion, and with the potential for legalized sports betting, including online, around the corner, should the Supreme Court overturn PASPA, it seems more and more unlikely that he would have any impetus to do so.