New Jersey AG Asks Justice Department to End iGaming Legality Discussion

Posted on: June 24, 2021, 09:20h. 

Last updated on: June 24, 2021, 10:21h.

Devin O'Connor @CasinoorgDevinO Read More

Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

New Jersey Attorney General Gurbir Grewal is calling on the US Department of Justice (DOJ) to end the years-long legal debate on iGaming in the state’s favor. 

The Wire Act has long been a subject of controversy in modern technological times. The federal statute was passed by Congress in 1961 and signed into law by then-President John F. Kennedy. Originally, the law was designed to crack down on underground betting networks. But in the age of the internet, the act has clouded the legality of various innovations, such as online lottery games and internet gambling. 

In 2011, the DOJ under the Obama administration ruled that the “interstate transmissions of wire communications that do not relate to a ‘sporting event or contest fall outside the reach of the Wire Act.” 

That effectively gave states the freedom to regulate lottery games online, including the selling of interstate products, such as Powerball and Mega Millions. It also gave states the right to legalize internet casino gambling. 

However, a DOJ opinion under the Trump administration in 2018 concluded that the Wire Act’s prohibitions are “not uniformly limited to gambling on sporting events or contests.” That thrust the law’s interpretation back into a state of confusion. 

Legal Clarity Needed

This week, the Biden administration’s DOJ decided against asking the Supreme Court to review the 2018 Wire Act opinion. And that has Grewal demanding answers from the federal government.

“It’s time for DOJ to lift the fog of ambiguity surrounding this important national issue,” Grewal told NJ.com.

We maintained from the start that the Trump-era Wire Act ‘reinterpretation’ was politically motivated and wrong on the law, and we’re proud to now join with our fellow states in calling for its official elimination,” Grewal added.

New Jersey and 26 other states have requested that US Attorney General Merrick Garland rescind the Trump administration’s decision on the Wire Act and return the feds’ interpretation to the 2011 stance. 

During former AG Jeff Sessions’ Senate confirmation hearing in 2017, he was asked if he would revisit the Wire Act by Sen. Lindsay Graham (R-South Carolina). The late billionaire Sheldon Adelson, who founded Las Vegas Sands, was a staunch opponent of online gambling. Adelson was a major donor to Graham and Trump. 

“I would revisit it [Wire Act], and I will make a decision on it based on careful study,” Sessions answered. Sessions added that he was “shocked” by the 2011 DOJ opinion.

Big Business in Interactive Slots

Only a handful of states have online gambling with interactive slot machines and table games. These include Delaware, New Jersey, Pennsylvania, West Virginia, and Michigan. But following the most unusual year in which COVID-19 shuttered land-based casinos, the importance of having iGaming in such a pandemic environment became crystal clear.

Nearly half of all gross gaming revenue (GGR) generated in New Jersey by its Atlantic City casinos in 2020 came via online channels. 

Online casinos reported a GGR of $931.5 million, more than double the amount they won in 2019.