Posted on: February 5, 2021, 12:59h.
Last updated on: February 5, 2021, 12:59h.
The Department of Justice (DOJ) probably will conform to last month’s appeals court decision on the Wire Act with only a little additional comment or measures, according to prominent gaming attorneys.
On Jan. 20, First Circuit judges in Boston sided with the state of New Hampshire, and rejected the DOJ’s 2018 Office of Legal Counsel (OLC) controversial opinion on the scope of the federal law.
The DOJ recently argued the Wire Act applied to all wagers and betting, not just sports bets. The opinion threatened to end online sports betting — and most other forms of internet gambling involving multiple states.
When asked about the recent ruling on New Hampshire Lottery Commission vs. Rosen, James Trusty, a former chief of the DOJ’s Organized Crime Section who now practices at Washington, DC-based Ifrah Law, explained it “completely negates the [DOJ’s] midnight memo trotted out in early 2019.
“It would be wise [for the DOJ] to simply withdraw the 2018 memo and return to the status quo from the last 10 years — simply to be totally clear on the department’s position.… It would be surprising and shortsighted for DOJ to suggest that they would have different rules in the other circuits while abandoning the poorly-reasoned 2018 memo,” Trusty told Casino.org.
Federal 2018 Opinion ‘Purchased’ by Sheldon Adelson
Robert Jarvis, a professor at Nova Southeastern University’s Shepard Broad College of Law, further told Casino.org, that President Joe Biden will not have the DOJ file an appeal to the Supreme Court in the New Hampshire case.
“Everyone knows that the 2018 OLC opinion was purchased by Sheldon Adelson and that its construction of the Wire Act made no sense,” Jarvis said. “This puts the case in a unique posture — normally, DOJ is defending a law passed by Congress. But here, it was defending its own handiwork, which it never believed in.”
Still, it remains possible that the DOJ will feel the need for some closure, says Jarvis, who is the co-author of Gaming Law and Gambling Law: Cases, Materials, and Problems (forthcoming Second Edition).
“If so, I would expect it to issue a one-page memorandum simply saying that it is reinstating the 2011 OLC opinion, which parallels the First Circuit’s decision,” Jarvis said.
“With Trump out of office and [Sheldon] Adelson dead, there’s no longer any political reason for folks like [Republican South Carolina Sen.] Lindsey Graham to push for an amendment/expansion of the Wire Act,” Jarvis said. Adelson, the Las Vegas Sands Corp. CEO who was also a strong opponent of online gaming, was a supporter of Trump and other Republicans.
In addition, A.G. Burnett, a former chair of the Nevada Gaming Control Board who now is a partner at Nevada’s McDonald Carano law firm, predicts there will not be prosecutions in the First Circuit’s jurisdiction based on the 2018 OLC opinion.
“It also seems likely there will be none elsewhere. This is because other circuit courts would likely give great deference to a sister court and not necessarily a DOJ opinion that was controversial when issued,” he told Casino.org.
“I think a formal revision of the 2018 memo by the DOJ to go back to the 2011 interpretation and move in line with the First Circuit’s guidance would be a nice end point, but ultimately may not be necessary,” Burnett adds.
DOJ May Quietly Abandon Wire Act Litigation
Also, Kate C. Lowenhar-Fisher, a Las Vegas-based attorney and chair of the gaming and hospitality practice group at Dickinson Wright, similarly said “I suspect the Biden DOJ will quietly abandon the case and withdraw the 2018 OLC memorandum.
“That would be much less murky than publishing some kind of no enforcement memorandum like President Obama did in connection with cannabis,” Lowenhar-Fisher told Casino.org.
“The status quo post-2011 would be restored, and perhaps we could put an end to legislating gambling via memoranda.”
Feds Should Not Pursue Gaming Cases if States Permit Activity
Overall, James Trusty suggests the “easiest fix” from the DOJ’s perspective, “is simply to clarify that federal prosecutors generally will not pursue gambling charges — Wire Act or other statutes — when the activity is licensed under state law.”
With the recent Wire Act appeals ruling in place, the DOJ is also “free to pursue off-shore sportsbooks operating illegally in the US, as well as any other criminal conduct that might be connected to otherwise lawful gaming, such as money laundering or organized criminal activity,” explained Trusty, who was presented the US Attorney General’s Distinguished Service Award in 2011.
“This would take the emphasis on gambling prosecutions back to where it has always been intended to be — a tool to use against organized criminal activity, not a threat against today’s regulated, popular betting across the country,” Trusty said.