NJ Senate President Ready To Defend Online Gambling Against Recent Wire Act Opinion

New Jersey Senate President Steven Sweeney is making his position crystal clear when it comes to the Department of Justice’s recent opinion on the Wire Act.

He disagrees with it

In a letter addressed to US Deputy Attorney General Rod Rosenstein last week, Sweeney defined what he sees as flaws to the latest interpretation.

And the Garden State is ready for a legal battle, if necessary.

Sweeney concluded the three-page letter from Feb. 13 with the following:

“If the OLC 2019 Wire Act Opinion is not rescinded, I have authorized former Senator Raymond Lesniak to file suit in U.S. District Court on behalf of the New Jersey Senate for a Declaratory Judgment that the 2019 OLC Opinion is arbitrary and capricious and that the statutory prohibitions of the Wire Act are uniformly limited to gambling on sporting events or contests.”

You can read the full letter here.

Sweeney’s letter follows the Feb. 5 joint letter by Pennsylvania and New Jersey’s attorneys general that called the opinion “deeply troubling.”

More from Sweeney’s letter

Sweeney’s letter mentions a separate 2011 letter written by then-Assistant Attorney General Robert Weich to then-US Sens. Harry Reid and Jon Kyl as evidence that “the 2011 OLC opinion was well-reasoned and not in need of reinterpretation.”

Sweeney continued:

“The 2019 opinion, which took 26 pages of tortured analysis of sentence structure and comma placements to determine that the clear language of the Wire Act applied to all forms of gambling, was contrary to the much better reasoned opinion of the 5th Circuit and the ‘thorough review’ of the Department of Justice in 2011.”

Furthermore, Sweeney states that the 2019 Wire Act opinion is an unreasonable about-face for the DOJ. NJ online gambling relied on the 2011 opinion to authorize its online casinos, online poker sites, and NJ online sports betting sites.

Sweeney also pointed out that the DOJ ignored previous interpretations that clarified the plain language of the Wire Act.

“By reversing its own opinion, the OLC admits the language is not plain and would require an analysis of the legislative history of the Wire Act, which would demonstrate that the Wire Act targeted only sporting events or contests to assist prosecution of organized crime run betting operations on sporting events and horse racing.”

The billion-dollar problem for NJ casinos

The stance Sweeney is taking against the DOJ and its new Wire Act opinion is for good reason. The NJ sports betting and online gambling industries are generating billions of dollars of revenue for Atlantic City casinos and the state treasury.

Numbers released by the New Jersey Division of Gaming Enforcement earlier this month are just the latest examples of why NJ officials and representatives are willing to fight.

NJ online gambling operators are coming off their best month ever with a reported $33,594,391. It’s the highest figure since the industry’s 2013 launch. It also marks the first time NJ online casino revenue surpassed $30 million.

NJ sports betting, which launched in June, is coming off a record January sports handle of more than $385 million.

But the majority of that number comes from online sportsbooks — $304,973,986.

Keep in mind, this only includes 11 mobile sportsbooks. Another, BetAmerica, had its soft launch earlier this month, and Golden Nugget only recently soft-launched its online sportsbook.

In a nutshell, NJ online gambling is a billion-dollar industry that has helped the once-struggling casino industry in the Garden State. It has also created thousands of jobs.

The new opinion, Sweeney wrote, “nullifies the intent of our legislation to make New Jersey a national and international hub for Internet gaming.”

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DOJ unlikely to rescind the opinion

The Wire Act of 1961 focused on illegal forms of sports betting (back then, nobody knew about this thing called the internet). The 2011 opinion clarified that the Wire Act only applies to sports betting and not other forms of online gambling.

The new opinion reverses course entirely, saying the Wire Act applies to all forms of online gambling.

Suddenly, the future of the lottery, online casinos, NJ sports betting, and even horse racing are left hanging in limbo.

Despite Sweeney’s wish, getting the DOJ to reverse course again is likely easier said than done.

Sweeney’s ultimate point is that reversing course eight years later and five years after New Jersey has a fully entrenched online gambling industry and other states (Pennsylvania) are in the process of launching, is the wrong move.

Sweeney, New Jersey not alone in the Wire Act battle

Sweeney is not alone in his fight against the DOJ and its new Wire Act opinion.

Legal Sports Report reported Friday that the New Hampshire Lottery has filed suit in federal court against the DOJ. Its goal is an attempt to stop the opinion from being enforced against the lotteries.

According to the story, NeoPollard Interactive — the technology and service provider of the NH lottery — also filed suit in federal court.

Earlier in the week, Jim Murren, chairman and CEO of MGM Resorts International, shared his thoughts on the Wire Act opinion during Wednesday’s conference call with shareholders.

“Perplexing is an understatement,” Murren said about the opinion.

MGM owns the Borgata, Atlantic City’s top-grossing casino. Besides being part of the NJ mobile online sports betting industry via its playMGM sportsbook, the company has four online casinos operating under its license.

Add to this the North American Association of State and Provincial Lotteries, the top lottery group in the US, which issued a statement calling the reversal bad for the industry.

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.