Since the U. S. Department of Justice’s Office of Legal Counsel issued a reversal last Monday of the 2011 decision by the Obama Administration’s decision regarding online sports betting, gaming and poker, there have been a flurry of opinions on the issue. Some entities have called the new opinion “unfortunate,” while other organizations are tempering their responses as they plan their next steps.
American Gaming Association – Issues “Unfortunate” Statement Despite No Stance
The American Gaming Association issued a statement on Friday, despite the factor that the AGA has had an inconsistent record regarding online activities over the past decade plus. Around 2006, the AGA was a strong opponent of online gaming, fearing it would cut into B&M revenues. After further study, the AGA reversed their decision in 2008, coming out in support of online gaming and poker, but then flip-flopped again in 2014 to taking “no stance” regarding the issue.
Thus, the AGA statement on Friday was a bit of a surprise but no change to their current stance. Sara Slane, the AGA Senior Vice President of Public Affairs, proffered, “It is unfortunate the Department of Justice departed from well-established practice in reversing its previous opinion without a compelling reason to do so. However, the 2018 OLC opinion does not impact the ability for states and tribes to legalize and regulate gaming on a state-by-state and tribal basis, or for companies to provide the exciting products and entertainment experiences our customers want.”
Poker Alliance – Thorough Analysis, Action Yet to Be Determined
The Poker Alliance stepped into the fray a couple of days after the OLC announcement with a statement of their own. Noting that this latest opinion from the OLC came eight YEARS after the previous administration, the Poker Alliance reconfirms their position is with the 2011 interpretation. In a lengthy letter to its membership, Poker Alliance President Mark Brenner explained the current situation.
“The 2011 interpretation conforms with what the courts have said on the matter, and that well-reasoned opinion has given states and the industry to freedom to authorize online gaming on an intra-state basis,” Brenner’s letter began. “The new interpretation, however, is far reaching and I believe it stands on shak(y) legal ground.”
After listing off several opinion pieces that further explain the Department of Justice decision and the errors in its reversal, Brenner says that current in-state operations shouldn’t be affected. “The core issue at stake is how the DoJ will treat the intermediate routing of internet gambling data that crosses over (incidentally) from a state where this form of gaming is legal into a state where it is not,” Brenner continued. “The Unlawful Internet Gambling Enforcement Act (UIGEA) rationalizes this and give a “safe harbor” for these types of incidental transactions as long as the operator and the customer are located within a legal jurisdiction. Because of this law, intra-state iGaming as it exists in New Jersey, Delaware, Nevada and Pennsylvania (soon to launch) is not considered “unlawful” internet gambling. Preserving this distinction will be critical moving forward.”
Brenner however points out the problems of the interstate compacts for online poker that have been developed. “The memo means that gaming activity that by its very nature are inter-state, like the multi-state compact to share internet poker liquidity, could be subject to a greater level of scrutiny. This will be a very important issue for poker players and the poker industry. As we know, poker’s success relies on volume of players, and we want to ensure a legal environment that fosters cooperation between states, not one that discourages it.”
Brenner does not enunciate what steps the Poker Alliance is taking, though. “There is still much to digest from the latest DoJ action and we continue to gather information,” Brenner concludes. “Please continue to follow us on social media for real time updates and we will be providing additional updates very soon.”
As it hasn’t been a week since the OLC reversal, all organizations have to be given time to figure out the way forward. But too much time allows the reversal to take root and threaten online sports betting, casino gaming and poker once again.