New Jersey, other states pushback against proposed interstate gambling laws

The Trump administration is having another go at potentially revamping the legality of online gambling, a move that has met opposition from state officials in New Hampshire, New Jersey and Pennsylvania and how it could harm the decade-old market.

Opponents worry that if the bid by the U.S. Department of Justice is successful, the move could seriously harm New Jersey’s online gaming market – and by extension the burgeoning sports betting industry – which has generated billions of dollars for the state since its legalization in 2011.

In 2018, the DOJ proposed expanding the Wire Act, a 1965 federal law which bars many kinds of interstate gaming in a bid to clamp down on mafia activities, so that it would effectively ban any types of gambling that crossed state lines.

Opponents worried the move would heavily weaken the state’s online gambling and sports betting markets because aspects of online gaming, such as internet connection and payment processes, cross state lines, which alone would violate the newly defined Wire Act.

The ruling was ultimately struck down in June 2019 by U.S District Judge Paul Barbadoro, for the District of New Hampshire. Barbadoro, in his 63-page opinion, said that the DOJ’s interpretation was “bizarre” and “plagued” by “incoherence.”

The DOJ appealed in December—a move since challenged by the New Hampshire Lottery Commission and two online gaming companies from the Granite State: Neopollard Interactive LLC and Pollard Banknote Limited.

Federal justice officials contended that New Hampshire and the plaintiffs would not be harmed by the Wire Act interpretation, and thus the court ruling should be struck down.

New Jersey Attorney General Gurbir Grewal signed onto the suit on March 4, his office announced this afternoon.

“This burgeoning…industry annually yields hundreds of millions of dollars in private revenue and tens of millions of dollars to New Jersey’s economy in State taxes and fees,” reads a 17-page amicus brief from the NJ OAG.

“The District Court’s correct interpretation of the Wire Act has allowed New Jersey’s … industry to continue, staving off the potential loss of significant revenue for the State and thousands of jobs for its residents.

Grewal argued in various fillings the last two years that the justice department’s decision was done at the backing of Las Vegas Sands Chief Executive Sheldon Adelson, a powerful casino lobbyist and Republican party mega-donor.

“The [Las Vegas] Sands Chief Executive, Sheldon Adelson, established the Coalition to Stop Internet Gambling to lobby against the [2011] opinion,” reads a federal public records request filed jointly between Grewal and the Pennsylvania attorney general’s office in February 2019.

Former state Sen. Ray Lesniak, a Democrat, who sponsored several bills over the years to legalize sports betting in New Jersey including a successful statewide referendum in 2011, contended that this judicial back and forth would ultimately keep the online gaming markets in New Jersey and other states “in limbo,” keeping them from wanting to expand their operations for years to come.