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Cross Border Online Gambling Industry Could Be Threatened by the Justice Department

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The US Justice Department’s legal opinion on online gambling that crosses state lines could hurt the industry. The 23-page opinion, released on Monday, reads the department’s interpretation of the federal Wire Act that prohibits cross-border wagering between states and allows to all kinds of gambling and betting activities, including sports betting and poker.

This report suggests a 180-degree flip in the department’s stance under the Obama administration in 2011 when they suggested that online gambling, barring sports betting, would not violate the federal law. The new interpretation could bring problems for the states of Nevada, New Jersey, and Delaware, all three of which started legalized poker for interstate players after the previous positive interpretation. Pennsylvania had legalized online casino gambling in 2017.

Internet gambling is a major source of revenue for casinos in New Jersey and Atlantic City. The Justice Department included some figures in its report, showing that the internet gambling revenue increased to $300 million in 2018 for New Jersey, amounting to a 21.6 percent increase.

The Wire Act was enacted in 1961 and intended to target the gambling activities of the mob. The Department says that the plain language of the statute made them misinterpret the connotations of the act the last time. They also said that the Wire Act is not a model of good drafting and “we conclude that the words of the statute are sufficiently clear and that all but one of its prohibitions sweep beyond sports gambling.”

Nevada and New Jersey’s major casino operator Caesars Entertainment declined to comment on the department’s Monday statement. The American Gaming Association, which the largest industry lobbying group in the US said that it is reviewing the opinions and its impact on the industry since a total of eight states are offering legal and regulated sports gaming options to their patrons.

Experts note that the sports betting industry will not be affected because of the department’s opinions as this option was already included in the previous interpretation of the Wire Act. Some others suggest that this could have an “immediate chilling effect” on the states’ ability to offer online lotteries.  It is likely that the Justice Department’s view will be challenged in court and their attorneys have also acknowledged the same in their Monday document.

There are many who are cheering for the USJD for the new opinion. Amongst them is former US Sen. Blanche Lincoln of Arkansas who said that the statement had discarded the earlier legal and moral problems of the previous interpretation while calling it a victory for children, their parents, and other vulnerable groups.

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