Michigan Lawmaker Calls Wire Act Opinion ‘Bunk’, ‘Irrelevant’ To Sports Betting

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Wire Act

Michigan Rep. Brandt Iden called last week’s Justice Department Office of Legal Counsel opinion on the scope of the Wire Act “pretty irrelevant” to his efforts to legalize sports betting and online gambling in the state.

“I think it’s a bunk DOJ opinion that has no legal standing,” Iden told Legal Sports Report. “It’s an opinion like anything else, and pretty much unenforceable. It certainly will not impact how we proceed in Michigan.”

Wire Act memo a ‘scare tactic’ to slow expansion

The new OLC memo, issued by Assistant Attorney General Steven A. Engel, ignores legislative history. It focuses on placement of commas to reverse a 2011 memo that the Wire Act applied only to sports betting.

Sports betting has been a focus of the Wire Act since the 1961 law passed. The Wire Act applies to wire transmissions that cross state lines, while the movement to legalize sports betting largely is at the intrastate level. As such, the opinion might not have any effect on states like Michigan choosing to allow sports betting.

However, Iden sees the memo as a toothless ploy to create uncertainty in an effort to slow down states from moving forward with regulated of sports betting and online gambling.

“There’s no doubt that the DOJ put that opinion out there to try to halt legislators like myself and others who have made huge strides,” Iden said. “They want to stop what’s going on in West Virginia, what’s going on in Michigan, and that’s why they put that out there. It’s a scare tactic to make people think for some reason they have legal jurisdiction to make these activities illegal.”

Pot precedent for path forward

Iden sees similarities in how the Trump Justice Department also tried to slow down state expansion of marijuana.

A year ago, then-Attorney General Jeff Sessions rescinded a 2013 Obama-era Justice Department opinion called the Cole Memo. That memo adopted a policy of non-interference with state laws regarding marijuana regulation.

The move created uncertainty in the marijuana industry but it didn’t stop Michigan from legalizing marijuana in November. Iden doesn’t expect this opinion will keep Michigan from doing the same this year with sports betting and online gambling.

“I think this will be similar to the way the federal government is choosing not to act when states proceed with marijuana legislation,” Iden said. “I don’t see the federal government wanting to get involved with this given the proliferation of lotteries in states and the many that have begun offering sports betting.”

The lotteries make strong allies

If the Justice Department prosecutes interstate online gambling transmissions using this opinion, the most prominent targets could be state lotteries. Going after state lotteries directly attacks major sources of state revenues. Often, percentages of lottery proceeds go to funding education and other worthy causes.

Iden contends any effort at enforcing the Wire Act opinion will result in lawsuits from state lotteries.

“If the federal government were to make a move, I think you would see a lot of states step up and defend their rights,” Iden said. “It could mean every state lottery with a Mega Millions jackpot or Powerball across the country is in violation. I don’t think any state is interested in shutting down the lotteries.”

History of Michigan sports betting legislation

On the final day of Michigan’s 2018 legislative session, lawmakers passed legislation to legalize online gambling and online sports betting. They then saw those bills vetoed by outgoing Gov. Rick Snyder after Christmas.

H 4926 was mainly a bill that legalized online gambling such as poker and casino games, but it included a line to “permit internet gaming operators licensed by the division to accept internet wagers under this act on any amateur or professional sporting event or contest.” Another bill, H 5881, established an 8 percent tax rate on adjusted gross receipts for sports betting.

Iden said passing a standalone sports betting bill was a priority of his heading into this session. If that didn’t happen, the Michigan Gaming Control Board could have moved forward with online sports betting. That of course came before the veto.

New Governor Gretchen Whitmer indicated during a campaign debate that she supports regulated sports betting in the state.

Future of Michigan sports betting legislation

After the veto, Iden doubled down on his intentions to pass online gambling and sports betting bills again in 2019. He expects to introduce the bills by early February.

Iden’s Lawful Internet Gaming Act passed by wide margins in the Senate (33-5) and House (71-35) just last month. He still cautioned that election turnover means he will start over in educating many of his colleagues.

Misinformation heard about the Justice Department memo will complicate Iden’s efforts. For example, an opinion piece in the New York Daily News from former Congressman Ron Paul falsely stated that the memo reinterprets federal law as prohibiting the state legalization of internet gambling.

“When the media gets a hold of misinformation and publishes it, it can make my job in educating my colleagues a little harder, but I still think the merits of our argument will win the day,” Iden said. “The whole package passed by large bipartisan majorities. I think we’re going to do that again, put this on the governor’s desk with bipartisan votes and it’s going to get done, regardless of the DOJ opinion.”