New Jersey AG Sues U.S. Justice Department Over Betting Case

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By Jordan Bianchi

May 9th, 2019 - 4:07pm

The New Jersey Attorney General filed a lawsuit against the U.S. Justice Department on Tuesday for failing to cooperate in sharing information with the state under the Freedom of Information Act, in a case involving a Las Vegas casino magnate which could impact New Jersey’s thriving online betting industry.

The lawsuit, filed by New Jersey Attorney Gurbir Grewal, alleges that the Justice Department did not respond in a timely manner to his office’s request seeking documents. The lawsuit states Grewal’s office made the request on Feb. 5 and the Justice Department, though it indicated it would comply within 20 days as required, failed to do so.

“To date, DOJ has provided no records in response to New Jersey’s request and provided no legal grounds for withholding responsive material,” Grewal’s office said in a statement.

N.J. Seeks Info on Wire Act Reinterpretation

Grewal’s office is seeking information on lobbying efforts conducted by Sheldon Adelson, chairman of the Las Vegas Sands Corp., which operates several Las Vegas casinos. Adelson vehemently opposes the expansion of online gaming across the United States and has financially supported the lobbying efforts of the Coalition to Stop Internet Gambling.

The lawsuit filed in U.S. District Court in New Jersey contends the Justice Department issued a directive in January that does not correctly interpret the Federal Wire Act of 1961. That law was established primarily as a way to combat interstate gambling often conducted by organized crime.

In 2011, under the Obama Administration, the Justice Department ruled the Wire Act was only applicable to sports betting, exempting all other forms of online gaming. New Jersey has since generated almost $352.7 million in annual revenue through online gaming, bringing in about $60 million in annual tax collections.

But the revised edict issued by the Justice Department in January reinterprets the Wire Act, now applying it across state lines. That decision essentially curtails the online gaming industry in New Jersey, and is considered a significant win and a potential financial boon for Adelson because bettors might feel more compelled to visit physical casinos to wager.

Grewal’s office seeks access to public records via the FOIA as it investigates what prompted the Justice Department to change its legal position on the Wire Act and whether Adelson’s influence impacted the decision. Adelson donated several million dollars to Donald Trump’s presidential campaign in 2016.

Online Wagering’s Impact on New Jersey

“Online gaming is an important part of New Jersey’s economy, and the residents of New Jersey deserve to know why the Justice Department is threatening to come after an industry we legalized years ago,” Grewal’s office said in the statement. “It’s especially important that we figure out whether this federal crackdown is the result of a lobbying campaign by a single individual seeking to protect his personal business interests.”

The New Jersey Attorney General Office’s suit is not the first against the Justice Department following its announcement in January on how it would interpret the Wire Act going forward.

In February, the New Hampshire Lottery Commission filed a lawsuit asserting state lotteries are exempt from the Wire Act. An attempt by the Justice Department to dismiss the case was denied by a federal judge last month.

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Written By
Jordan Bianchi

Jordan Bianchi writes about sports gambling for TopUSBets.com. His work has appeared in numerous reputable online eGaming and sports publications including Reuters, Yahoo, SB Nation, Sporting News, Autoweek and much more. He’s covered a wide array of sports including... Read More

Jordan Bianchi writes about sports gambling for TopUSBets.com. His work has appeared in numerous reputable online eGaming and sports publications including Reuters, Yahoo, SB Nation, Sporting...

Read More