11 States and DC Fight DoJ’s Review of Wire Act

30-second summary

  • Casino mogul Sheldon Adelson is said to be the main force behind the DoJ’s review of the Wire Act
  • 11 states and the District of Columbia have joined the legal fight against the review
  • Reversal of the Wire Act could impact state lottery sales

Wire Act under review

Several US states have banded together in a legal fight against a proposed Department of Justice action that could threaten internet gambling and state lotteries.

The legal battle involves the Wire Act of 1961. In 2011, the Obama Administration’s Department of Justice ruled that the law applied only to interstate sports betting, which allowed states to offer internet lottery sales and online sports betting.

Now the Trump Administration’s DoJ has decided to review the Wire Act, according to Law360. The department could rule that the law applies to all wagers, not only sports bets.

It’s reported that changing the interpretation of the Wire Act is backed by online gambling opponent Sheldon Adelson, who was a major donor to Trump’s presidential campaign and to the Republican Party in general. He is also the CEO of Las Vegas Sands, considered the world’s largest casino operator. In January, the Wall Street Journal reported that the billionaire was the main force behind the Justice Department’s review of the Wire Act.

According to the report: “In April 2017, one of the [Adelson] lobbyists sent a memo to top officials in the Justice Department, arguing that a 2011 opinion that benefited online gambling was wrong. Officials in the department’s Criminal Division, in turn, forwarded it to the Office of Legal Counsel, which had issued the opinion, and asked attorneys there to re-examine their stance that a law on the books for decades didn’t prohibit online gambling, according to documents and interviews with people familiar with the matter.”

States Take Action

As a result of the DoJ’s opinion, New Hampshire announced that it was suing the US. It initially filed the suit in February to prevent the Department of Justice from interfering. Soon after, New Jersey and Pennsylvania got on board. Michigan has become the latest state to join the cause.

Pennsylvania filed a request to become co-plaintiff in the case challenging the Wire Act earlier this month, but the request was denied by Judge Paul J. Barbadoro.

The order stated: “I deny the motion for substantially the same reasons that caused me to deny the prior motion to intervene. Further, I categorically reject the proposed intervenor’s contention that it is entitled to intervene as of right in this case simply because an adverse ruling could affect the lawfulness of its state statutes under certain circumstances.”

The Michigan Lottery has submitted an amicus brief, which, if accepted, will give it the right to participate in the legal fight. The brief has been joined by 11 states and the District of Columbia. The states are Alaska, Colorado, Delaware, Idaho, Kentucky, Mississippi, North Carolina, Rhode Island, Tennessee, Vermont, and Virginia.

The DoJ now has a battle on its hands. For the states involved, this battle is worth it. After all, if the department does change the Wire Act, those states could lose billions of dollars in revenue.