The Attorneys General of New Jersey and Pennsylvania – two of the four states that have legalized online poker – have written a letter to Acting U.S. Attorney General Matt Whitaker and Deputy Attorney General Rod Rosentein, protesting the recent new Wire Act opinion issued by the Justice Department’s Office of Legal Counsel (OLC). In the letter, they request that the opinion be withdrawn or at the very least be given a guarantee that the Justice Department won’t take legal action against online gaming companies in their states.
They begin the letter by briefly explaining the issue at hand, that theirs and other states relied in the 2011 opinion of the OLC that the Wire Act applies only to sports betting to guide their development of online gaming industries. They detail how much online gaming, as well as the lottery, has benefited their states financially.
The letter continues:
The potential breadth of this opinion is deeply troubling. 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. This decision puts jobs and livelihoods at risk for the thousands of people who work in the online gaming industry and jeopardizes critical state funding for the public good that is generated by lottery sales and other Internet activity that is legal within our states.
One issue they have with the new Wire Act opinion, in particular, is that “criminal charges can be brought even where the interstate transmission of information is merely incidental to betting that is otherwise entirely lawful under state law.”
The Attorneys General also make a good, succinct case that the new opinion not only makes little sense, and is the product of crony capitalism, but the Justice Department also contradicts itself in issuing it:
We can see no good reason for DOJ’s sudden reversal. First, it runs contrary to plain language of the Wire Act. 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.” 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.
In late January, the Pennsylvania Gaming Control Board told casino general managers and counsel that they should make preparations to conform to the new Wire Act opinion, as the DoJ could potential start enforcing the Wire Act on April 15th.