Jake Banks | 11 Jun 2019

US Judge Rejects DOJ’s Opinion Of Online GamblingA federal judge has rejected a 2018 opinion that expanded the 1961 Interstate Wire Act to cover online gambling from the US Department of Justice’s Office of Legal Counsel. According to District Judge Paul Barbadoro’s ruling delivered, the act applies to interstate sports betting only.

The DOJ was challenged by the state of New Hampshire as well as by the Lottery Commission after the November 2018 opinion included online casinos, lotteries, and Poker among the activities prohibited by the act. The state lottery’s vendors’ servers are located in Ohio and Vermont, which means the opinion effectively had criminalized its operations.

According to the judge’s ruling, the expanded scope of the act left the state, the commission, and others like it, in a predicament: they would either need to shut down operations, spend a large amount of money to comply with the law, or possibly face prosecution.  

Sports Betting Only

One of the problems with the act was that it became law 30 years before the first online casinos were launched, thus addressing a completely different situation. Syntax was another problem, as it meant the wording of the act was not clear.

Judge Barbadoro therefore undertook to assess all the evidence, among which was the 2011 OLC Opinion, which led to the launch of New Jersey’s first online casinos. His review of the history of the law lead to his conclusion that it applied only to bets placed on sports.

As much as the ruling is a victory for the state and its lottery corporation, it may not be enough to keep the DOJ at bay. That will become clearer within the coming weeks, as the department had given operators in states such as Delaware, Nevada, and New Jersey until 15 June to comply with the act. Initially, it was to come into effect in mid-April.

New Jersey Joins the Fray

New Hampshire was not the only state to challenge the DOJ on the matter. According to reports, New Jersey Attorney General Gurbir S. Grewal filed a suit against it after it ignored his Freedom of Information Act request for information regarding the possible involvement of Las Vegas Sands chairman and CEO Sheldon Adelson in the 2018 opinion.

Adelson has been a vociferous opponent of online gambling, as he regards it as a threat to land-based venues. He was alleged to have lobbied the DOJ Office of Legal Counsel in an attempt to protect his own interests.