MGM’s CEO Sounds Off On ‘Perplexing’ New Wire Act Opinion

The Department of Justice’s new interpretation of the Wire Act does not have too many fans.

Count Jim Murren, chairman and CEO of MGM Resorts International, among them. He addressed the controversial topic during the company’s earnings call on Wednesday.

Murren doesn’t sugarcoat things either.

“This latest missive from the DOJ, perplexing is an understatement.

And if read as words, it would mean that Powerball as it exists in 44 states in the United States isn’t legal anymore. It’s just we think an absurdly, poorly written and unenforceable opinion. I don’t think anyone in the industry, the gaming industry or the sports betting industry, feels any differently [in the wake of the opinion].” 

MGM is all in with NJ online gambling, sports betting

If strictly enforced, the opinion could have far-reaching effects on all sections of legal online gambling in the US. The uncertainty, therefore, is real for MGM.

The MGM-owned Borgata in Atlantic City is fully invested in the NJ mobile online sports betting and online gambling industries.

The PlayMGM Sports app was one of the first to join the NJ sports betting market on Aug. 22.

Borgata also has four NJ online gambling brands under its license.

Murren isn’t alone in his thinking

Last week, New Jersey Attorney General Gurbir S. Grewal issued a press release stating that the new opinion is “wrong” and “deeply troubling.” Joining him in the “strong opposition” was Josh ShapiroPennsylvania’s attorney general.

The joint letter follows a string of opposition to the opinion from all corners of the US gambling market. The lottery, as well as individual states like Massachusetts, have decried the recent opinion.

For its part, NJ and PA asked that the administration either withdraw the new opinion or “guarantee that DOJ will not bring enforcement actions against companies in our states that are acting lawfully under state statutes.”

The two-plus page letter addressed to Acting Attorney General Matthew Whitaker and Deputy Attorney General Rod Rosenstein includes a number of pressing issues. Among them is in regards to interstate transmission of information that is “merely incidental,” according to the letter.

“The opinion casts doubt not only on traditional online gaming, but also multi-state lottery drawings (such as Power Ball and Mega Millions) and online sales of in-state lottery tickets. While regulators and the industry are reviewing the full range of impacts this opinion may have, each potential implication is of concern.”

As such, Murren’s comment follows a similar path.

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NJ online gambling is in the billions

The previous Wire Act opinion helped clear the path to launch NJ online gambling in 2013.

The industry has generated more than $1 billion in its five-plus years of existence.

The New Jersey Division of Gaming Enforcement released the latest figures on Wednesday, and the monthly figures shattered the $30 million mark setting a new all-time record in the process.

NJ sports betting continues to set records, too.

January’s reported handle came in at $385 million. But the majority of that number came from NJ online sports betting — $304,973,986 to be exact.

David Rebuck, director of the DGE, believes the current regulatory model is fine the way it is.

“New Jersey has regulated online gaming for five years and has developed the most successful regulatory model in the world. The State is fully committed to maintaining and ensuring the highest regulatory standards for New Jersey’s evolving online gaming industry, including the most recent addition of sports wagering.”

In other words, with so much at stake, MGM may not be the only gambling company to question the OLC opinion.

About the Author

Bill Gelman

Bill Gelman is a veteran sports writer based just outside of Philadelphia and not too far from the Jersey Shore. Bill spends time in Atlantic City writing about casino openings and expansions, special events and world championship boxing at Boardwalk Hall. He is now adding NJ sports betting and online gambling to the mix.