New Jersey Threatens Lawsuit Over Wire Act Reversal

Continuing a prominent news story of vital interest to the US’s online-poker and online-gambling world, New Jersey has announced to the US Department of Justice its plans to sue the DOJ over its issuing last month of an opinion reversing the DOJ’s own earlier 2011 opinion that limited the scope of the Wire Act to sports betting, at the time clarifying the legality of online gambling at the federal level.

Instead, while a separate part of the deepening story showing that last month’s Wire Act reversal opinion was a piece of illicit business orchestrated by Sheldon Adelson and supervised by the supposedly-recused-on-online-gambling-matters former US Attorney General Jeff Sessions, New Jersey has gone the frontal-attack route. In a letter dated yesterday, February 13, 2019, and disclosed publicly by OPR, New Jersey State Senator Majority Leader Steve Sweeney has requested the DOJ immediately rescind the reversal opinion issued in January and revert to the policy established following the notable 2011 opinion rendered by then-USAG Eric Holder.

Failing that — and it’s extremely likely that the Justice Department will indeed rescind last month’s opinion — Sweeney also disclosed to Deputy US Attorney General Rod Rosenstein that New Jersey will authorize former NJ State Senator Frank Lezniak (who’s also a lawyer, to file suit against the DOJ on New Jersey’s behalf.

From the letter:

Accordingly, in the event the OLC [the DOJ’s Office of Legal Counsel] 2019 Wire Act Opinion is not rescinded, I have authorized former Senator Raymond Lesniak to file suit in the U.S. District Court on behalf of the New Jersey Senate for a Declaratory Judgment that the 2019 OLC Opinion is arbitrary and capricious and that the statutory prohibitions of the Wire Act are uniformly limited to gambling on sporting events or contests.

Citing the 2019 OLC Opinion’s “26 pages of tortured analysis of sentence structure and comma placements” in its sweaty effort to re-expand the Wire Act’s reach, Sweeney lays the groundwork for that presumptive legal challenge. The 2019 OLC opinion “was contrary to the much better reasoned opinion of the 5th Circuit and the  ‘thorough review’ of the Department of Justice in 2011.”

Sweeney’s letter to the DOJ and Rosenstein also directly cites the two “In re: Mastercard” court rulings in the US that have examined precisely the issue under debate — whether the Wire Act applies to anything other than traditional sports betting. In both cases the court decisions have come down on the side of a more limited Wire Act interpretation in line with the 2011 Holder opinion. And as established case law, those two previous rulings will carry significant impact if (as expected), this current matter goes to court.

It’s fairly easy to see where this goes next. The recent OLC opinion allowed for a grace period to “allow” states to make sure that their online-gambling offerings are in adherence with the new position. Once that  grace period elapses, it’s almost certain that New Jersey, will go ahead with its plans to sue, possibly also seeking an emergency stay regarding the recent opinion. (Note that it is only an “opinion” at this point and does not carry the weight of established case law with it.)

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