New Jersey Holds Its Fire In Light Of New Hampshire Wire Act Ruling

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The ruling issued Monday by a federal district court judge in New Hampshire in favor of the state lottery’s online game sales would seem to be a signal to New Jersey, moreso than any state, to be similarly aggressive in protecting its extensive online casino gaming operations.

After all, it was the Garden State that passed a sports betting law in 2012 that led to last year’s U.S. Supreme Court decision that opened the door for all states to follow suit.

But former state Senator Ray Lesniak, who helped lead the charge in the sports betting saga, now seems resigned to having to sit this one out.

“I’d be more than willing to step forward again, but the attorney general doesn’t want to do that and risk an adverse ruling [in the Third Circuit],” Lesniak told NJ Online Gambling.

“Politically motivated”?

Attorney General Gurbir S. Grewal did not address that issue in his statement, but he was pleased that Judge Paul Barbadoro firmly ruled that The Wire Act of 1961 applies only to sports betting. That reversed an amended formal opinion published by the Department of Justice in January that left numerous forms of legal, regulated gambling potentially in violation of federal law — depending on technical interpretations of how the gambling occurs.

“DOJ’s politically motivated decision to undermine online gaming across the country put a vibrant and essential industry at risk right here in our state,” Grewal said. “That is why I stood up against the Trump Administration and explained that DOJ was dead wrong in how it was reading the Wire Act.

“Today, a federal judge in another state agreed with our arguments, confirmed the Wire Act allows online gaming to flourish, and set aside DOJ’s flawed approach. I call on DOJ to comply with this ruling across the country, and to finally drop its efforts to criminalize state-sanctioned online gaming.”

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In February, Grewal demanded that the Trump administration provide copies of any communications between White House officials and Las Vegas casino billionaire Sheldon Adelson, who is both the top donor to the national Republican Party and the leader in the fight against online gambling legalization.

Then last month, Grewal sued DOJ after he did not receive the desired communications.

What the ruling means

Lesniak said that the New Hampshire ruling “certainly didn’t hurt” the cause of legal online gaming operators, “but I don’t know that it really helped much.”

Other attorneys disagreed.

Jeff Ifrah, who represents the iDevelopment & Economic Association, told NJ Online Gambling that it was significant that Barbadoro “essentially rescinded” the new opinion, meaning that a 2011 DOJ opinion that gave the green light to online lotteries now is more relevant.

Matthew McGill, the attorney for the New Hampshire Lottery’s operator, echoed the sentiment.

“Because the court ‘set aside’ the Justice Department’s incorrect re-interpretation of the Wire Act, this ruling has nationwide impact,” McGill said in a statement.

Ifrah said that while New Jersey’s online poker and other casino games are not quite fully “immunized” from potential prosecution, the DOJ would have a difficult time making a case in the Third Circuit or elsewhere.

“The industry is in a strong position now,” said Ifrah, whose non-profit association seeks an expansion of legal online gaming in the U.S.

Ironically, that position would not be as strong had the judge accepted the first argument presented by attorneys for the New Hampshire Lottery.

“The plaintiffs argue that the First Circuit has authoritatively ruled that the Wire Act applies only to sports gambling. It has not,” Barbadoro wrote in his 60-page ruling. “The plaintiffs confuse the court’s dictum in United States v. Lyons [a 2014 case in the same First Circuit], with binding precedent.”

In the Lyons case, two defendants were accused of taking both sports bets and other “casino” bets. While the jury was instructed to focus on only the sports bets because that is all The Wire Act covered, that didn’t set a precedent to which the judge referred.

Instead, Barbadoro painstakingly parsed the vague wording of The Wire Act and concluded that the law was not intended to address any gambling across state lines except sports betting.

What’s next?

The Department of Justice has 30 days to file an appeal. A spokesperson said in a statement that “DOJ is reviewing the decision and declines to comment further at this time.”

“They have a right to appeal,” New Hampshire Lottery Executive Director Charlie McIntyre told local media. “They have to file that within a month, and if they do, it goes on. But certainly, we’re business as usual.”

Photo by Marco Rubino / Shutterstock.com

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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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