Since starting in 2013, the online gambling industry in the United States has been under fire. Certain people and groups do not want online gambling to take place, despite the fact that the industry brings in much-needed funds to states where it is legalized and help to do away with an illegal black market. The way that iGaming came to pass was when the Obama Administration decided to reinterpret the Wire Act from 1961 to modern times. However, that act was changed years later by the Trump administration and now the gambling industry is at risk.
The state of New Hampshire has been fighting the Federal Wire Act of 1961 changes and now, New Jersey is joining in. Last week, NJ Attorney General Gurbir Grewal filed an amicus brief within the First Circuit Court of Appeals to help with the fight.
Last summer, Judge Louis Barbadoro ruled the new interpretation of the Wire Act only applies to sports betting. Meaning the interstate online sports betting cannot take place but all else is fair game. The 2011 ruling of the Wire Act was upheld while the 2018 ruling was rejected. The 2018 decision said that online poker, lottery games and traditional lottery gaming feel under the law.
In 2019, the New Hampshire Lottery decided to file a lawsuit against the federal government, stating their gaming operations were under fire.
In the brief filed by Grewal, he stated that he is in agreement with the Judge’s ruling of the Wire Act and the 2011 ruling. He also said that reliant interests in New Jersey should be considered. With that statement the AG provided several financial figures that related to the legalization of online poker as well as other online casino gaming options.
Pointing Out the Problem
In his filing, Grewal pointed out that if the online gaming industry were to close suddenly, his state would suffer a huge setback. In just three years, the industry has a whole has generated more than $100 million in revenues for New Jersey. The industry continues to grow at a rapid rate, providing even more revenues each and every year.
According to the AG, if the 2018 interpretation of the Wire Act is upheld, it would force the state’s online gaming operators to shut down to avoid prosecution. It would signal losses of around $60 million in tax revenues each year. The Division of Gaming Enforcement would lose almost $7 million in fees with as many as 300 jobs lost.
Additional job losses would occur as offices for online gaming brand shut down in the state. Business would then be driven to the offshore illegal gambling sites. All of the hard work completed in the state to build a successful industry would be for nothing with a complete shutdown.
Close to 60 companies would be affected along with hundreds of vendors who operate in the sector.
The brief calls the Trump DOJ reinterpretation of the Wire Act one that should be rejected due to its statutory arguments as they are flawed along with the fact that the change in position harms the reasonable actions taken in 2011 with the DOJ opinion from that time.
The case continues on and hopefully with the support of New Jersey we will soon see the issue resolved for good, in favor of the 2011 interpretation.
