Lesniak Celebrates Legal Victory – Could NJ Poker Players Be Next?

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Former New Jersey state Senator Ray Lesniak took a two-pronged victory lap in Boston on Wednesday, a year and a day after the U.S. Supreme Court vacated the 26-year-old federal law that banned nearly all sports betting outside of Nevada.

But it was a fellow panelist who clarified that a ruling on a pending federal lawsuit might give New Jersey – and Pennsylvania – poker players reason for their own celebration.

Lesniak appeared on an ICE North America panel with Matthew McGill, a partner in the Gibson, Dunn & Crutcher law firm. The firm is representing Neopollard Interactive, the operator of the New Hampshire Lottery, in a lawsuit against a new opinion issued by the Department of Justice earlier this year.

That opinion concluded that The Wire Act, a 58-year-old federal law, applies to all forms of interstate gambling. That left a number of sectors unsettled, including state lotteries.

That’s because not only are Mega Millions and Powerball very successful multi-state games with sometimes massive jackpots, even a state lottery ticket at least in theory could be deemed “interstate” given how the technology behind the production of the ticket.

With $77 billion spent by Americans last year in 45 states as well as Puerto Rico, the U.S. Virgin Islands, and the District of Columbia, a victory by McGill’s law firm would calm the waters of a major U.S. industry.

Big implications in New Hampshire case

But I asked McGill what the broadest possible court victory could be in the case. Would it just be lotteries extricating themselves from the administrative tangle?

No, McGill explained. Part of the lawsuit alleges violations of the Administrative Procedure Act, a law that governs how federal agencies issue regulations.

If the judge agrees on that angle – and a decision is expected later this month – then the new opinion is void and it’s back to Square One, which is that the Wire Act applies only to interstate sports betting.

That would erase concerns about the current online poker compact among New Jersey, Nevada, and Delaware – and also open the door for Pennsylvania, which has announced its in-state online poker will launch by mid-July, to join the crowd.

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That would be a major step forward in “liquidity,” with the Keystone State players helping to provide sufficient players for far more games at various stakes than currently exists. Such a legal victory also would allow industry backers to lobby uncertain legislators in other states by explaining that their residents also would be able to join a compact that could boost tax revenues in all jurisdictions.

While Lesniak conceded afterward that the case could be decided as McGill suggested it might, he added that he still would prefer for the battle to be joined in New Jersey’s Third Circuit.

McGill disagreed, saying, “The surest way to kill an industry is to go to court and lose.” He was referring to the fact that there is a precedent in the First Circuit court that concluded that The Wire Act is restricted to interstate sports betting, and he has used that fact to bolster his current case before the judge. There is no such precedent in the Third Circuit.

Jim Ryan, the CEO of Pala Interactive, referred to the fact that last year’s Supreme Court ruling on sports betting seemed to put to rest potential federal legal issues with U.S. gaming – only to have the DOJ issue its Wire Act opinion just eight months later.

“This sector can’t catch a break, is my take on it,” said Ryan.

Lesniak brings jersey – and a taste of Jersey – to Boston

Earlier on Wednesday, Lesniak served as the keynote speaker for a group that previously has held its events outside the U.S. But the ripple effects of that 2018 Supreme Court decision has led to a relative frenzy on the part of European gaming companies to find dance partners in the U.S.

After an introduction from lobbyist William Pascrell III that included him referring to Lesniak as “the Leonardo da Vinci of the gaming industry,” Lesniak regaled the audience with his account of his nearly decade-long battle to topple the Professional and Amateur Sports Protection Act of 1992.

Clad in a soccer jersey and jacket after noting that he forgot to bring along a shirt and tie, Lesniak touted his new book, “Beating The Odds: The Epic Battle That Brought Legal Sports Betting Across America” by reading aloud several chapter topics.

Included in the speech were digs at President Trump, former New Jersey Governor Chris Christie, other political figures, and Las Vegas casino operators – especially Sheldon Adelson.

Lesniak effectively put to bed, meanwhile, the notion that New Jerseyans can expect to be able to bet on college games down the road. He said polling before the 2011 sports betting referendum showed diminished support if residents could bet on athletic contests at schools such as Rutgers or Seton Hall.

It would take an additional referendum to add state schools to the broad sportsbook menus – and, Lesniak said, “That would never pass.”

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John Brennan

John Brennan has covered NJ and NY sports business and gaming since 2002 and was a Pulitzer Prize Finalist in 2008, while reporting for The Bergen County Record.

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