State Attorney Generals Criticize DOJ’s Online Gambling Policy

Tuesday, February 12th, 2019 | Written by April Bergman
State Attorney Generals Criticize DOJ’s Online Gambling Policy

New Jersey Attorney General Gurbir Singh Grewal and Pennsylvania Attorney General Josh Shapiro penned a joint letter to Acting U.S. Attorney General Matt Whitaker and Deputy Attorney General Rod Rosenstein protesting a recent opinion issued by the DOJ on the 1961 Wire Act.

Gurbur Singh Grewal (pictured) and Josh Shapiro argued that the Wire Act was designed to combat organized crime — not harm legitimate businesses legalized and regulated by state governments. The letter states: “We can see no good reason for DOJ’s sudden reversal. First, it runs contrary to plain language of the Wire Act.”

The two state AGs also argued that previous court cases dovetail with the opinion stated by the DOJ’s Office of Legal Counsel (OLC) in 2011. The letter says, “Second, DOJ has recognized that it should ’employ considerable caution in departing from…prior opinions,’ in light of the ‘strong interests in efficiency, institutional credibility, and the reasonable expectations of those who have relied on our prior advice.'”

New Jersey, Pennsylvania AGs

The New Jersey and Pennsyvlania attorney generals then hint at the influence of lobbying groups — particularly GOP donor Sheldon Adelon. They added, “Here, however, DOJ acknowledges that states were relying on its prior advice and did not provide any intervening facts or information to justify such a major departure. Press reports instead indicate that this new advice followed substantial lobbying by outside groups that have long been unhappy with the 2011 opinion — but who were unable to convince Congress of the merits of their view. That is not a good enough reason to trample over the law and states’ rights, and to upend the settled expectations on which we have been relying for nearly a decade.”

Singh Grewal and Shapiro then added that the recent opinion by the OLC “undermines the values of federalism”. The US Constitution enshrines the concept of “dual sovereignty” — the federal governments and the 50 individual state government share sovereignty in the United States. According to the US Constitution, in matters of law which involve a single state, the federal government has no right to impede upon states’ rights.

Single-State Online Gambling

With that in mind, online poker and online casinos which allow people inside a single state to sign up and play should be handled by that state’s government. When the federal government gets involved in such decisions, it is taking an unconstitutional act which violates dual sovereignty.

That is why it is so important for companies that launch legal online gambling websites and gaming apps to assure such gaming does not cross state lines. The telecommunications cannot cross state lines, so all servers must be within a state.

To comply with such parameters, Deputy AG Rod Rosenstein gave companies a 90-day grace period to comply with the law. Whether enforcement of said policies will be forceful or nonexistent is anyone’s guess, but the issue concerns Gurbir Singh Grewal and Attorney General Josh Shapiro.

Restore America’s Wire Act

People who support the current interpretation by the United States Department of Justice (Sheldon Adelson, Matthew Whitaker, Lindsey Graham) argue that the OLC opinion returns US law to its status in the 1960s, when the law was first enacted.

Opponents of that view point out that sports betting violations were enforced, but gambling on poker, craps, or slot machines had no place in the enforcement of the Wire Act — such games could not be played over the telephone.

Robert Kennedy on 1961 Wire Act

Online gambling advocates also found statements by Robert Kennedy, who was US Attorney General at the time the 1961 Federal Wire Act was passed. Kennedy specifically stated that the Wire Act should not be used to infringe on states’ rights. Its use was specific to organized crime on sports betting.

Robert Kennedy testified before Congress why wireless communications were not included in the “[W]ireless communication was not included in this bill because it is our belief that the Federal Communications Commission has ample authority to control the misuse of this means of communication.”

Sports Data and Analysis

RFK also said the Wire Act should not be used to punish simple newspaper or media accounts of US sports: “[The bill] is not interested in the casual dissemination of information with respect to football, baseball, or other sporting events between acquaintances.”

Case law suggests that the pro-online gambling advocates have a case. In U.S. v. Baborian, the federal court system said the “Wire Act does not sweep within its prohibition a mere bettor.” U.S. v. Martin and U.S. v. Marder could be used by the other side to justify their more expansive view of federal authority in online gambling.