Georgia State Capitol

Georgia Governor Worried Wire Act Opinion Could Hurt Lottery

It must be a really bad feeling when someone who you thought liked you actually didn’t give a shit about you at all, that whatever that person did that made it seem like they were your friend was really done to benefit them personally. Such is the case, so to speak, for Georgia Governor Brian Kemp, who hitched his wagon to Donald Trump’s star during his controversial 2018 gubernatorial campaign. Recently, Governor Kemp and Georgia Attorney General Chris Carr wrote a letter to the U.S. Department of Justice, asking the powers-that-be to reexamine its new interpretation of the Wire Act, as – *GASP* – it may hurt the Peach State.

Georgia StampWe have covered the Wire Act extensively on Flushdraw, but let’s do it again, for old time’s sake. The Interstate Wire Act of 1961 was intended to curtail organized crime and specifically and only prohibited interstate sports betting over wire communications. Clearly, the internet wasn’t a thing nearly 60 years ago, so it was reasonable that it was applied to internet sports betting more recently. The problem is that once online gambling started about two decades ago, the Justice Department interpreted the Wire Act to apply to all online gambling, not just sports betting.

Such was the case until late 2011, when the Justice Department’s Office of Legal Counsel (OLC), then under the Obama Administration, issued an opinion in response to queries from a couple states, saying that the Wire Act only applied to sports betting, as anyone with two eyes and a functioning brain could see was the case. This opened the door for states to legalize and regulate internet gambling.

In November 2018, though, the OLC, now part of the Trump administration’s Department of Justice, looked at the Wire Act again and decided that, whoops, it applied to all online gambling. The OLC published the new opinion in January 2019. Shortly thereafter, the Wall Street Journal published a report saying that Las Vegas Sands CEO Sheldon Adelson, who has for years been committed to squashing online gambling in the United States, had a hand in the OLC’s review of the Wire Act, that it was his lobbyists who gave the Department of Justice their own legal opinion and asked for another review of the law. Seeing as Adelson is a massive Republican donor and a spiritual kin to Trump, the DoJ willingly did his bidding.

States and gaming operators originally had 60 days from January 15th to get into compliance with the new interpretation of the Wire Act, but that deadline was extended by then-Deputy Attorney General Rod Rosenstein, so June 14th is now the last day of the grace period.

Georgia: MAGA! Wait…What?

But Georgia officials are worried that this insane Wire Act interpretation could kill Georgia’s online lottery sales as well as make interstate lotteries, like Mega Millions and Powerball, illegal. Georgia is one of a handful of states that sells lottery tickets online. Both regular jackpot lottery tickets (like Powerball) can be purchased on the Georgia Lottery site, as well as “Diggi Games,” which are basically online scratch-off tickets (I just made a five dollar profit on a play money ten dollar ticket!).

One of the sticking points in the new OLC opinion is that internet payment processing for lotteries often crosses state lines, even if the origin and destination are within the same state. This would technically be illegal. And, of course, lotteries like Powerball are multi-state games, with loads of states linking up to create enormous jackpots.

Proceeds from the Georgia Lottery go toward funding pre-kindergarten programs and the immensely popular HOPE Scholarship, which provides merit-based tuition assistance for students attending in-state colleges and universities. The HOPE Scholarship program has been so successful that its funds have been dwindling, causing officials to reduce benefits over the years and tighten eligibility requirements.

Bills have been introduced in the Georgia legislature over the past few years to try to legalize casino gambling in the state in order to create new jobs, generate tourism dollars, and inject cash into the HOPE Scholarship program. None of the attempts have gone very far.

And now Governor Kemp, who did not think the leopard would eat his face, is afraid that the Wire Act opinion could put a significant hurting on his state’s financial well-being (but he’s not worried about that with the recently signed “heartbeat bill,” even though it could kill a multi-billion dollar film industry in the state).

Kemp and Carr wrote that if the Wire Act were to make internet lottery sales illegal, it “would devastate the benefits provided to citizens in Georgia and across the nation through state lotteries.”

“In light of these concerns, we seek assurance from the department that state lotteries are not implicated by the 2018 opinion’s interpretation of the Wire Act,” they added, hoping that crony capitalism might still have a carveout for state-run gambling.

“We therefore respectfully request clarification that the department does not consider the activities of state lotteries, including the transmitting of lottery wages via electronic routing across state lines, to be in violation of the Wire Act.”

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