Category Archives: Federal Policy

New Jersey Plans to Sue the DOJ over Online Gambling Ruling

Casino Watch Focus has reported on the ongoing saga of the DOJ’s handling of the Wire Act as it pertains to gambling over both the Obama and Trump Administration. Most recently, the DOJ announced they had gone back to the long standing interpretation of the wire act that makes all forms of online gambling, not just sports gambling as the Obama Administration claimed, are illegal. This has understandably prompted a reaction from those that have decided to promote gambling in the online space. One of the more vocal states in regard to sports and online gambling has been New Jersey and they plan to sue the DOJ if they don’t reverse their stance. An online source reports:

New Jersey Senate President Stephen Sweeney has asked the Department of Justice to rescind its new opinion on the Wire Act. And if the DOJ does not, Sweeney has indicated NJ will go to court.

Sweeney’s letter to Rosenstein followed up on his statement days after the OLC opinion was made public in which he called on Lesniak, an attorney who served in the New Jersey legislature for 40 years, to come out of retirement to help protect the online gambling and sports betting industries that he helped bring to the state.

Lesniak then wrote a letter to Sweeney outlining how New Jersey could fight the opinion, and Sweeney used some of that language verbatim in his letter to the deputy attorney general.

Lesniak, who reactivated his license to practice law in the state of New Jersey on Monday, tells Online Poker Report that he plans to wait 30 days for new *US Attorney General Bob Barr* to get up to speed on the issue before filing the complaint requested by Sweeney.

The odds seem slim that the DOJ will resend their ruling. They aren’t taking a radical stance and they are simply going back to the clear intent of Congress that stood for so many years before the Obama Administration opened the flood gates of gambling by reversing the original intent. They have also been hinting at his position change for a while, so it truly seems unlikely that they would reverse their position based on New Jersey’s position. Time will tell if they follow through, but it seems likely that they will file a motion in court. 

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Guest Article: DOJ opinion will help protect kids from dangers of online gambling

Casino Watch Focus has reported on the new Department of Justice ruling that reestablished online gambling to be illegal under the wire act. The need for this ruling existed because the long standing intend of the wire act was erroneously reinterpreted by the Obama Administration to only apply to sports betting. This opened the flood gates to all other forms of online gambling. John Kent, Law and Economics Professor at the University of Illinois and the Senior Editor of the United States International Gaming Report opined why this reversal will help protect kids in an article published by The Hill: 

Until 2011, this DOJ ban had been in place for 50 years via the DOJ’s use of former U.S. Attorney General Robert F. Kennedy’s Wire Act, 18 U.S.C. sec. 1084, which was initially passed to fight organized crime.

In concert with the recommendations of the 1999 U.S. National Gambling Impact Study Commission established by Congress, the DOJ’s use of the Wire Act protected the public — and particularly kids — from 24/7 online gambling, including gambling on video games.

However, on Dec. 23, 2011 via a 13-page memo, the DOJ’s Office of Legal Counsel (OLC) reversed its long-held interpretation of the Wire Act to allow online non-sports gambling.

This 2011 OLC opinion was immediately vilified by the national press as reflecting corrupt influences and conflicts of interest, as detailed by the editorial board of the Christian Science Monitor on Dec. 27, 2011.

During a congressional hearing on Sep. 27, House Judiciary Chairman Bob Goodlatte (R-Va.) again raised these bipartisan concerns, including OLC conflicts of interest. On Dec. 11, incoming Senate Judiciary Chairman Lindsey Graham (R-S.C.) signaled to Gambling Compliance that he thought that the 2011 OLC opinion was incorrect.

Showing a picture of a child on his wireless ipad, Newsweek’s front cover on Aug. 14, 2014 stated:
“How Washington Opened The Floodgates To Online Poker, Dealing Parents a Bad Hand.”

Subsequently, the severe social and economic consequences of online gambling were highlighted in congressional hearings on March 25, 2015, and most recently on Sep. 27 before the House Subcommittee on Crime, Terrorism, Homeland Security, and Investigations, chaired by Rep. James Sensenbrenner (R-Wis.).

The full article can be viewed HERE. 

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With Sports Betting Now Legal, Super Bowl Betting Brings Even More Risk and the NFL Attempts to See Prop Bets Banned

Casino Watch Focus has reported on the numerous gambling impacts expected around the Super Bowl. Each year the amount of gambling seem to increase and the expectations for Super Bowl LIII (53) between the Las Angeles Rams and the New England Patriots is no different. However, the recent Supreme Court decision that has legalized sports betting will seemingly exacerbate addiction problems and open the door for people who may have otherwise avoided the pitfalls. The executive director of the Council on Compulsive Gambling explains through an online source in New Jersey, the state that is effectively responsible for fighting for expanded sports betting :

“This year we’re particularly concerned as sports betting is now legal, and we know that more people, even those who didn’t traditionally gamble may gamble on the big game,” Neva Pryor, executive director of the Council on Compulsive Gambling of New Jersey, said.

She said an estimated $4.7 billion was bet illegally last year on the game, but with sports betting now permitted “we don’t really have any forecast — but I would imagine that’s going to be even more.”

She said for some, betting adds to the fun and excitement of the game. But for others it’s a destructive seduction that can ruin lives and families. “We’re concerned that people will overextend themselves or might possibly create a problem,” Pryor said.

Ease of access and the variety of gambling types around the Super Bowl are the primary drivers of this year’s concern. Executive Director Neva Pryor continues:

Pryor said added element of concern is all of the side bets that can be placed on a football game — including who scores first, who will make the first interception, the first fumble. People may bet “on the coin toss, on what they think the color of somebody’s hair will be, or whatever.”

She said people can easily bet online “so they can be sitting at home and placing a bet, they can be at the office and placing a bet, so there’s more opportunity and more ease of play.”

She said the ease of online gambling has definitely created new concerns.

“That’s why we have such a high rate of problem gamblers in the state, we have over a 6 percent ratio of people who possibly have a gambling problem in the state of New Jersey,” Pryor said. 

The NFL sees issues with Super Bowl betting and prop bets beyond the addiction concerns of Council on Compulsive Gambling. Their primary worry is that bets that focus on individual performances can leave the game open to game fixing scandals. As reported by one Fox News source, the NFL spoke to Congress in hopes of getting such bets banned: 

But if the National Football League had its way, bets on things like passing touchdowns for New England Patriots quarterback Tom Brady or rushing yards for Los Angeles Rams running back Todd Gurley would be restricted — or even outlawed as too risky and vulnerable to manipulation or cheating.

Proposition bets — also known as prop bets — are less popular during the regular season but gain steam during the Super Bowl each year as a way to bet on the outcome of more than one thing at a moment the sports world is intensely focused on a single game.

In testimony before a U.S. House of Representatives committee on Sept. 27, NFL Executive Vice President Jocelyn Moore asked Congress to let professional sports leagues and gambling regulators ban prop bets that involve the performance of individual athletes over the course of a game.

“Examples might range from the number of passing yards by a quarterback in a football game or the number of points or rebounds by a team during a quarter of a basketball game, to the number of ‘throw-ins’ in a soccer match, or even how many flags a referee might throw in a contest,” she testified. “These types of bets are significantly more susceptible to match-fixing efforts, and are therefore a source of concern to sports leagues, individual teams, and the athletes who compete.

“To address concerns regarding risky betting fixtures, we encourage Congress to allow professional and amateur sports organizations to identify which types of bets simply pose too significant a risk to the integrity of sports and to work with regulators not to authorize them,” she said.

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Online Gambling in Jeopardy in Wake of New Dep of Justice Ruling

Casino Watch Focus has reported on the impact of the Obama Administration’s reinterpretation of the long standing Wire Act. It very clearly made online gambling that crossed state lines illegal, but the Obama Administration said it only covers sports betting, thereby opening the floodgates to all forms of online gambling except sports betting. This understandably led to a lot of concerns and questions over the safeguarding of those with access to online casinos, poker rooms or lotteries. Casino Watch reported two years ago that the Trump Administration was heavily considering reversing that reinterpretation and restoring the Wire Act to its original congressional intent. The Associated Press is reporting that the Department of Justice has followed through: 

The 2011 opinion opened the door for cash-strapped states and their lotteries to bring online gambling to their residents, as long as it did not involve interstate sports betting.

Nevada, New Jersey and Delaware legalized online gambling after that opinion was issued, and the three states have agreements allowing poker players to compete online across the states. Pennsylvania became the fourth state to legalize online casino gambling in 2017.

Now, the Justice Department says the previous opinion misinterpreted the statute.

“Based upon the plain language of the statute, however, we reach a different result,” attorneys for the department wrote in the opinion dated Nov. 2. “While the Wire Act is not a model of artful drafting, we conclude that the words of the statute are sufficiently clear and that all but one of its prohibitions sweep beyond sports gambling.”

The Wire Act was enacted in 1961 to target the mob and its gambling activities.

The full scope of the impact of this decision by the Depart of Justice is still unknown and this story will continue to develop. It’s very possible that a sea of litigation will be opened up, but the Depart of Justice hasn’t fully explained how severely they plan to enforce this interpretation. The AP continues: 

Jennifer Roberts, associate director of the International Center for Gaming Regulation at the University of Nevada, Las Vegas, said the impact of the opinion rests on how strictly the Justice Department is going to enforce the new interpretation of the statute.

“Some could go really far and say even if you send a text message to a casino customer in another state and you are saying ‘Come play blackjack this weekend here’s a deal,’ arguably you can say that is information that assists in the placement of a wager,” she said. “I doubt it will go that far, but we will once again be subject to the interpretation.”

The new legal opinion will likely be challenged in court, an issue acknowledged by the department attorneys in their document.

Daniel Wallach, co-founding director of the University of New Hampshire School of Law Sports Wagering and Integrity Program, said the opinion could have “an immediate chilling effect” on the ability of states to conduct lotteries online.

“I think the most obviously impacted stakeholders are the lotteries that do internet sales, and that group is the most likely stakeholder to challenge this opinion in court.”

Advocacy group Coalition to Stop Internet Gambling and former U.S. Sen. Blanche Lincoln of Arkansas in a statement cheered the new opinion, characterizing the previous one as “problematic legally as it was morally” and calling the new one a “win for parents, children and other vulnerable populations.”

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Bipartisan Federal Sports Betting Regulations Introduced

Casino Watch Focus has reported on the ongoing battles to legalize sports betting outside of Las Vegas. Since the recent Supreme Court decision effectively allows individual states to pass sports betting legislation, many have called for a federal response to provide uniform and consistent guidelines. Now, a new bill has been brought forth and it’s a bipartisan effort. Forbes explains: 

Days before he is scheduled to retire, Orrin Hatch has a parting gift for the Senate. Hatch and Sen. Chuck Schumer introduced bipartisan legislation on Wednesday that would create uniform federal standards for the legalized sports betting market. The bill, the Sports Wagering Market Integrity Act of 2018, is being introduced less than eight months after the Supreme Court’s landmark decision in May that struck down a 26-year federal ban on sports gambling.

“This bill is the first step toward ensuring that sports betting is done right in the states that choose to legalize it. Just as importantly, it provides protections for states that choose not to go down that path,” Hatch said in a statement.

The proposed legislation includes a mandate that would require sports wagering operators to use data provided or licensed by sports organizations to determine the outcome of sports wagers through 2024. Upon the completion of the transition period, the proposed bill allows operators to use alternative forms of data if they can prove that it is sufficiently similar to the data provided by the leagues.

Each state has 18 months to come into compliance with the legislation before the bill takes effect. Hatch, a Utah Republican, was an original author of the Professional and Amateur Sports Protection Act, a 1992 federal law that prohibited sports betting.

This bill has garnered the support of the NFL and others as its viewed as having the necessary regulatory guidelines and enforcement tools to help regulate the industry as best as it can. Forbes continues: 

“The bipartisan legislation that Senator Hatch and I have introduced, follows the principles laid out in the federal framework that I released in August and will serve as solid foundation upon which we build the appropriate guardrails around the burgeoning sports betting industry,” Schumer said in a statement.

In the months since the Court rendered its decision, the NFL has advocated for the imposition of robust federal guidelines that could mitigate some of the societal risks posed by sports gambling. On Wednesday, NFL Executive Vice President Jocelyn Moore applauded the senators for establishing positions in the bill that “closely aligned,” with the core standards she articulated in testimony before Congress. Specifically, Moore appeared pleased with guidelines that could provide law enforcement with tools to penalize unscrupulous actors closely tied to the dark underbelly of gambling.

Not everyone supports the bill and others see it as a vehicle for expanding the Wire Act to involve all interstate betting, not just sports betting. The changing political landscape will also complicate the issue. Forbes wraps up by reporting: 

There were also reports on Wednesday that the Department of Justice is prepared to reverse a 2011 opinion from the Office of Legal Counsel on the Federal Wire Act. When the department issues the opinion, the government could find that the act pertains to all forms of online gambling, not just sports betting, according to Online Poker Report. In an opinion seven years ago, the office wrote that the act only applied to the latter.

The bipartisan bill from Hatch and Schumer, a New York Democrat, seeks to update the Wire Act to allow certain interstate wagers. The draft also proposes the creation of a new mechanism that could allow the Justice Department to target unlicensed, illegal offshore sports betting websites.

The timing of a vote still remains in question. Besides Hatch’s retirement, a leadership change in the House of Representatives could complicate matters.

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Supreme Court Betting Case Lawsuit Against NFL and other Sports Leagues Shot Down by Court

Casino Watch Focus has reported on the New Jersey Monmouth Park lawsuit against the sports leagues in the wake of the Supreme Court legalizing sports betting. For years New Jersey attempted to legalize sports gambling, and for years, the courts shot down all their efforts. In the states most recent attempt however, the managed to get their case before the Supreme Court and they emerged victorious. Most simply moved forward with sports legalization efforts, but New Jersey’s Monmouth part saw an opportunity to sue the sports league. Their claim was that the various leagues had blocked years of sports betting revenue. Unfortunately for Monmouth Park, a court rejected their claim. ESPN reports:

Late Friday, United States District Judge Michael A. Shipp denied a claim filed in May by the New Jersey Thoroughbred Horsemen’s Association (NJTHA) — a group associated with the Monmouth Park racetrack and casino — asking “for judgment on $3.4 million injunction bond plus interest and damages.”

The New Jersey-based group had filed the renewed claim against the NFL, NCAA, NBA, NHL and Major League Baseball within weeks of the Supreme Court’s May 14 decision that opened the door for states to authorize sports betting nationwide.

“The Court … finds NJTHA was not wrongfully enjoined,” wrote Judge Shipp in a just-released nine-page ruling obtained by ESPN. “The Court, accordingly, finds good cause exists to deny NJTHA damages under the injunction bond.”

With the courtroom win, the NFL, NCAA, NBA, NHL and Major League Baseball avoid a ruling that would have allowed other bookmakers to claw-back money allegedly lost during the time between when the five leagues sued to enforce the federal law banning single-game wagering outside of Nevada, and the date the Supreme Court declared the ban to be unconstitutional.

Monmouth Park and the NJTHA could potentially appeal Judge Shipp’s ruling in the coming weeks. The group had previously claimed “that the Leagues acted in bad faith by wrongfully blocking the NJTHA from operating a sports betting venue at Monmouth Park.” Neither current New Jersey Governor Phil Murphy nor former Governor Chris Christie were part of the case.

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Military Personnel to be Screened for Problem Gambling under new Trump Directive

Casino Watch Focus has reported on the concerns of gambling in the military. The Department of Defense actually operates gambling facilities where service personnel gamble on slot machines. A few years ago Sen. Elizabeth Warren pushed an amendment to study the issues of problem gambling saying, “If the military is going to operate gambling facilities that bring in tens of millions of dollars in revenue, it also needs to ensure there is adequate prevention, treatment, and financial counseling available for service members struggling with gambling addictions.” She explained that over 36,000 service members fit the definition of problem gamblers. Now the Trump Administration has passed an initiative to screen for problem gambling during service member’s medical examinations. An online source explains: 

Members of America’s armed forces will now have to undergo screening for gambling addiction thanks to a new provision contained within the *National Defence Authorisation Act* that was signed into law by *President Trump* this week.

Section 733 of the House Armed Services Committee Report 115-874 requires the Department of Defence (DoD) to incorporate medical screening questions specific to gambling disorder in the next annual periodic health assessment conducted by the Department as well as in the Health Related Behaviours Surveys of Active-Duty and reserve component service members.

NCPG executive director *Keith Whyte* said: “Previous DoD surveys have found active duty personnel are two to three times more likely to have gambling problems than civilians. Better detection of gambling problems improves overall health and reduces social costs. Undetected gambling addiction exacerbates substance use disorders, depression and suicidal behaviour.”

He added: “NCPG strongly believes military personnel need and deserve effective gambling addiction prevention, education, treatment, enforcement, research, responsible gaming and recovery services. With the provision requiring members of the Armed Forces to be screened for gambling addiction, championed by Senator Elizabeth Warren, we take a vital step to improving the lives of service members and their families.

 

 

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