Sheldon Adelson Gets His Way, Department Of Justice Says All Online Gambling IllegalNew DOJ Opinion Says Wire Act Applies To All Online Gambling, Not Just Sports Betting |
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In a new memorandum dated Nov. 2, 2018, the Department of Justice has reconsidered its 2011 opinion that the Wire Act, a federal law banning bettors from transmitting gambling data across state lines, only applied to sports betting.
The position, which came during President Obama’s administration, opened the door for states to license and regulate online gambling. Nevada was the first, followed by New Jersey, Delaware, and Pennsylvania. Several more states have considered, or are currently considering legalizing some form of online gambling in the near future.
That progress is now threatened by the DOJ’s Office of Legal Counsel, which is siding with Las Vegas Sands CEO Sheldon Adelson, whose Coalition To Stop Internet Gambling has poured millions into a campaign against the activity.
“Today’s decision seamlessly aligns with the Department’s longstanding position that federal law prohibits all forms of Internet gambling, as well as with Congress’s intent when it gave law enforcement additional tools to shut down the activity through the overwhelmingly-passed Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006,” said former Arkansas Senator Blanche Lincoln in a statement for the coalition. “Today’s landmark action to rightfully restore the Wire Act is a win for parents, children and other vulnerable populations."
The lasting effect that this reversal will have on existing online gambling markets and operators is unknown, although the DOJ has made it clear that the sports betting clause only applies to certain sections of the law.
“Having been asked to reconsider, we now conclude that the statutory prohibitions are not uniformly limited to gambling on sporting events or contests. Only the second prohibition of the first clause of section 1084(a), which criminalizes transmitting ‘information assisting in the placing of bets or wagers on any sporting event or contest,’ is so limited. The other prohibitions apply to non-sports-related betting or wagering that satisfy the other elements of section 1084(a).”
Read the full opinion here.
The decision could also have an impact on interstate lottery and online poker compacts. Nevada, New Jersey, and Delaware share player pools for online poker.
Adelson and his wife Miriam were the Republican Party’s top donors during the 2016 election, shelling out $113 million for conservative politicians and causes, including $20 million to President Trump’s campaign. His coalition spent years lobbying in Washington against the 2011 reversal.
President Trump’s first Attorney General Jeff Sessions said in January of 2017 that he was “shocked” by the DOJ’s reinterpretation of the Wire Act and vowed to “revisit” the decision during Trump’s tenure. Sessions has since been fired and replaced by acting AG Matthew Whitaker.
The Interstate Wire Act of 1961 was originally created to curb organized crime from intrastate gambling activities. Online gambling proponents argue that the Wire Act was implemented before the internet even existed, and therefore shouldn’t apply.
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