NJ attorney general sues DOJ over casino owner's link to Wire Act opinion

by Administrator
in Legal

The state attorney general has filed a lawsuit against the federal Justice Department for not providing answers about a Las Vegas casino magnate’s influence over a legal decision that could impact New Jersey’s online gaming industry.

Attorney General Gurbir S. Grewal filed suit Tuesday in U.S. District Court against the DOJ for failing to respond to Freedom of Information Act requests about Sheldon Adelson’s lobbying efforts related to the government’s recent Wire Act opinion. Grewal filed a FOIA request in February seeking documents about Adelson’s involvement in the Wire Act decision but did not receive records or a response indicating why documents were not being provided.

A request seeking comment from the Las Vegas Sands Corp. was not returned Tuesday.

The Interstate Wire Act is a 1961 federal law that sought to make interstate gambling illegal to curtail organized crime’s influence over the industry. The 2011 DOJ opinion was the result of bipartisan pressure in the U.S. Senate to curtail all forms of internet gambling. But the push backfired and the DOJ opined in 2011 that the Wire Act applied only to sports betting.

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Adelson is CEO of Las Vegas Sands Corp., a close ally of President Donald Trump and a major Republican donor. Adelson has fought the expansion of online gaming, believing it to be a threat to his brick-and-mortar casinos and a contributing factor to gambling addiction.

“Online gaming is an important part of New Jersey’s economy, and the residents of New Jersey deserve to know why the Justice Department is threatening to come after an industry we legalized years ago,” Grewal said in a news release Tuesday. “It’s especially important that we figure out whether this federal crackdown is the result of a lobbying campaign by a single individual seeking to protect his personal business interests.”

The most recent opinion of the Wire Act, released in January, suggests the law applies to all forms of online gambling, including casino games, sports betting and lotteries, and is in direct contrast to a 2011 Justice Department opinion that the New Jersey Legislature relied on before legalizing internet wagering in 2013. The opinion indicated federal prosecutors could bring criminal charges against individuals or companies that offered online gaming services, even in states where the practice was legal.

Online gaming in New Jersey has generated more than $2 billion in revenue and nearly $153.23 million in taxes since its introduction.

In the complaint, Grewal claims the state requested an expedited response since the DOJ opinion will go into effect June 14. The suit noted an expedited FOIA request should be fulfilled within 20 days, according to the DOJ’s own guidelines.

The New Hampshire Lottery Commission filed a lawsuit against the DOJ over the Wire Act opinion. New Jersey was among several states that filed an amicus brief in support of the New Hampshire suit. Rod Rosenstein, then the deputy attorney general, clarified the opinion last month when he said the new directive would not apply to state lotteries.