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New Jersey hits back at DOJ in Wire Act dispute


New Jersey Attorney General Attorney General Gurbir Grewal has filed an amicus brief setting out the state’s opposition to the US Department of Justice’s (DoJ) reinterpretation of the 1961 Wire Act, arguing federal law permits most forms of online wagering.

Grewal filed the new amicus brief with a First District Federal Court of Appeals in response to the DoJ’s appeal against a New Hampshire Court decision that struck down its revised stance on the Act, published in January 2019.

The DoJ’s revised stance said that the Wire Act’s prohibition applies to all forms of gambling and not just sports betting, thus reversing a 2011 ruling. The opinion came following a request from the DoJ’s Criminal Division to reconsider the 2011 ruling, which paved the way for the roll-out of online gambling in a number of states.

At the time, this prompted a robust response from Grewal, who argued that it appeared to have been influenced by anti-igaming lobbyists.

The New Hampshire Lottery Commission filed a lawsuit challenging the opinion, and prevailed in District Court in June 2019. Judge Paul Barbadoro rejected the DoJ Office of Legal Counsel’s 2018 opinion that claimed the Act covered all forms of gambling.

Judge Barbadoro also rejected the DoJ’s argument that New Hampshire had no grounds to file the case, as the revised opinion had not yet been enforced.

The D0J in August 2019 said that it would appeal against the ruling, filing a notice to appeal with the US Court of Appeals for the First Circuit.

New Jersey has filed the amicus brief to combat this appeal, with Grewal saying that if the DoJ’s reinterpretation ends up being adopted, it has the potential to end New Jersey’s igaming industry.

“I was proud to help lead the successful fight for the future of New Jersey’s online gaming industry against the DoJ, and I’m committed to defending our victory on appeal,” Grewal said.

“Lawful online gaming is both effectively regulated in New Jersey and vital to the economic well-being of Atlantic City and our state. DoJ was right to promise in 2011 that online gaming was perfectly legal, and New Jersey staked a significant part of its economic future to that promise.”

The amicus brief said the new interpretation would pose a substantial threat to jobs and revenue in New Jersey. Since its inception in 2013, the New Jersey regulated market is estimated to have directly or indirectly created 3,374 jobs and paid $218.9m in wages to employees in the state.

It noted that legal igaming had generated hundreds of millions of dollars in sales for private and public entities in New Jersey, and has been a major source of tax revenue to state and local governments.

The brief added the DoJ had a duty under the federal Administrative Procedures Act to take into account the heavy reliance multiple states took on the 2011 opinion assuring them that the online gambling was legal.

Grewal added: “We’re going to keep pushing back against the politically-driven reinterpretation.”