Pennsylvania Attorney General Josh Shapiro has joined New Jersey Attorney General Gurbir S. Grewal in telling the US Department of Justice exactly what it can do with its latest opinion on the Wire Act.

In a letter dated Feb. 5, Shapiro and Grewal ask Acting Attorney General Matthew Whitaker and Deputy Attorney General Rod Rosenstein to withdraw the opinion completely. Or at the very least, tell DOJ prosecutors to refrain from bringing any action against the online gaming industry or players in either state based on it.

Is online gambling now a federal crime?

The DOJ’s latest interpretation appears to reverse its 2011 opinion the decades-old Wire Act only applied to sports betting. The 2011 opinion is what led several states to believe they could legalize online gambling.

Shapiro and Grewal’s letter expresses the pair’s “strong objections” to the DOJ’s reversal of that opinion. In particular, because it may make online gambling a federal crime, even in states where it is now legal.

The letter states:

“This about-face is wrong and raises significant concerns in our states. We ask that DOJ withdraw its opinion altogether or assure us that DOJ will not bring any enforcement actions against companies and individuals engaged in online gaming in our states — where it is appropriate under state law.”

It goes on to claim this DOJ opinion appears to run contrary to previous policies:

“We can see no good reason for DOJ’s sudden reversal. First, it runs contrary to plain language of the Wire Act. Second, DOJ has recognized that it should ’employ considerable caution in departing from … prior opinions,’ in light of the ‘strong interests in efficiency, institutional credibility, and the reasonable expectations of those who have relied on our prior advice.'”

Is it Adelson’s opinion or the DOJ’s?

Additionally, the pair has submitted a Freedom of Information Act (FOIA) request looking to find out exactly where the new opinion comes from. The FOIA request is specifically seeking information related to outside groups’ lobbying efforts urging the DOJ to reconsider.

Anti-online gambling zealot Sheldon Adelson is CEO and founder Las Vegas Sands Corporation. He has been asking the DOJ to reverse its Wire Act opinion since it was released in 2011.

A January Wall Street Journal report indicates the new opinion comes directly from a lobbying group memo. The lobbying group is funded by Adelson. The Washington Post also published a similar article Feb.7. It outlines how the opinion appears to have been influenced by Adelson and the group.

Although, the DOJ claims any accusation that the opinion was shaped by any outside interest is baseless and offensive.

Shapiro and Grewal’s letter states:

“Press reports … indicate that this new advice followed substantial lobbying by outside groups that have long been unhappy with the 2011 opinion — but who were unable to convince Congress of the merits of their view. That is not a good enough reason to trample over the law and states’ rights, and to upend the settled expectations on which we have been relying for nearly a decade.”

Hundreds of millions at stake

Shapiro and Grewal’s letter also indicates the new opinion threatens the online gambling industry in PA and NJ, and all it has created so far, including:

  • $350 million in annual revenue and $60 million in gaming taxes in NJ
  • $23.8 million in online lottery revenue in PA
  • Jobs, economic health, and state funds for the public good in both states

The letter states:

“The opinion casts doubt not only on traditional online gaming, but also multi-state lottery drawings (such as Power Ball and Mega Millions) and online sales of in-state lottery tickets. While regulators and the industry are reviewing the full range of impacts this opinion may have, each potential implication is of concern.”

Shapiro and Grewal’s letter appears to be only a part of growing opposition to the DOJ opinion.

The North American Association of State and Provincial Lotteries also sent a letter to the DOJ urging it to reconsider.

It states:

“The recent United States Department of Justice, reinterpretation of the Wire Act of 1961 creates a substantially detrimental impact on the lottery industry, including traditional retail-based draw and instant lottery games, as well as traditional lottery games offered over the Internet, and the billions of dollars for good causes lotteries provide.”