Inside A Plan To Protect NJ Sports Betting From New Wire Act Opinion

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Wire Act

A letter obtained Friday by Legal Sports Report outlines how New Jersey might fight the recent Wire Act opinion reversal by the Department of Justice.

Writing to New Jersey Senate President Steve Sweeney, former state Senator Ray Lesniak called for the state legislature to file a declaratory judgment action in US District Court against the recent DOJ opinion on the Wire Act in order to “protect and preserve the significant benefits accruing to the State of New Jersey and our residents from internet gaming.”

Lesniak also called for New Jersey officials to request a reversal of the new opinion and to seek assurance from the DOJ that mobile NJ sports betting falls under the safe harbor provision of UIGEA. The latter could provide insight into how New Jersey and other states might approach a Wire Act battle.

Lesniak’s help requested for NJ gambling

Sweeney and New Jersey Senate Democrats asked Lesniak, the retired state senator who led the charge for New Jersey to legalize sports betting and online gambling, to prepare a response asking the Justice Department to reconsider its January reversal of its prior opinion that the Wire Act’s scope was limited to sports betting.

Noting that the opinion has the potential for substantial negative impact on Atlantic City casinos, Lesniak, an attorney, attested the legislature has standing to file a declaratory judgment because the opinion will “nullify its internet gaming legislation.”

He advised a complaint would need to be accompanied by affidavits detailing the harm experienced as a result of the opinion.

NJ sports betting, iGaming have helped state

Lesniak recalled how Atlantic City casinos and New Jersey racetracks were spiraling downward with the closing of five casinos before the legislature authorized internet gambling in 2013 and sports betting in 2018.

Together, they produced $1 billion in new revenue, prompted two casinos to reopen with the return of thousands of jobs, and sparked a recovery for the horse racing industry. They also provide hundreds of millions in tax dollars that will continue to support the state’s budget.

Lesniak contended that the opinion issued by the DOJ Office of Legal Counsel “casts an ominous cloud over our internet gaming operations and potentially over our internet sports betting operations.”

Wire Act opinion misses the mark

The new opinion reverses a 2011 memo issued by the same office that the Wire Act’s scope was limited to sports betting. That year, Lesniak first introduced his legislation to legalize online gambling, which was signed into law two years later.

He writes that he introduced the legislation because it was his opinion that the 2011 memo was correct.

Lesniak then led the way to overturning the federal ban on sports betting because it was his opinion that PASPA was unconstitutional. Last year, the Supreme Court agreed.

Now his legal opinion is that the 2019 DOJ opinion is incorrect in failing to heed legislative intent when the language in legislation is not clear.

An act as clear as mud

Lesniak hammered the OLC’s “tortured 23-page justification” for ignoring the legislative history showing that the law was intended only for sports betting based on the argument that the statutory language was sufficiently clear.

Lesniak made the common-sense observation:

“How could the 2019 opinion be ‘based upon the plain language of the statute’ when the DOJ came to the opposite opinion in 2011? By reversing its own opinion, the DOJ admits the language is not plain and requires an analysis of the legislative history of the Wire Act, which would demonstrate that the Wire Act targeted only sports events or contests to assist prosecution of organized crime run operations taking bets on sports events and horse racing.”

Further recommendations made by Lesniak

In addition to the legislature filing a declaratory judgment, Lesniak’s overall recommendations include: