Groups seek to bolster defense of recent Wire Act opinion

Two groups stridently against legalized online gambling in the United States, the National Association of Convenience Stores (NACS) and the Coalition to Stop Gambling (CSIG), have filed a motion to intervene and become defendants in the important American “Wire Act” federal case. The case pits the state of New Hampshire against the US Department of Justice (DOJ), with the future of legalized online gambling in America already at stake.

Counsel representing NACS and CSIG filed the motion to intervene in the case on Thursday, May 23. The two groups had previously been recognized as amici curiae (“friends of the court”) in preliminary findings in the case, and have submitted memorandums in support of the DOJ’s recent “reversal opinion” regarding the reach of the US’s 1961 Wire Act.

If left intact, that reversal opinion would effectively bar all gambling-related electric and electronic communications in the US that cross state lines, while also making some forms of online gambling entirely illegal.

However, the two groups assert in the filing that the DOJ is “not adequately represent[ing] the interests of CSIG and NACS” and that “amicus?status is thus insufficient to protect their interests moving forward.” The motion to intervene is already opposed by the state of New Hampshire and its two state-run lottery entities, while the DOJ itself did not approve or disapprove, but disputed the groups’ claim that its legal efforts in the case to date have been inadequate.

CSIG the secret force behind reversal opinion

Though united in support of the DOJ’s reversal opinion, which was announced in November 2018, the two groups represent very different segments of the anti-online gambling spectrum. NACS’ wholly financial interest stems from lottery-ticket sales across the US having been sold predominantly through convenience stores for nearly 40 years.

That near-monopoly was weakened in late 2011 when then-US Attorney General Eric Holder issued an opinion on the Wire Act that limited its reach to only sports betting. Holder’s opinion had been sought by several US states, including New York and Illinois, that sought to increase over lottery sales by adding online channels, but had been left in uncertain legal waters due to the original Wire Act’s inexact language.

NACS’ amicus partner, CSIG, has played a larger and darker role in the battle. CSIG was created and funded by the US casino-entertainment company Las Vegas Sands, Inc. and its CEO, Sheldon Adelson. Adelson has long viewed online gambling as a threat to his land-based casino operator, which includes the Las Vegas mega-casinos Palazzo and Venetian.

Adelson, a multi-billionaire, famously vowed to spend “whatever it takes” to have online gambling in the US permanently banned, and Sands-funded lobbyists also wrote the failed “RAWA” (Restore America’s Wire Act) that floated around the halls of the US Congress for most of the past decade.

CSIG has since added a phalanx of generally ultra-conservative religious groups to its roster in a marriage of political convenience. CSIG, Las Vegas Sands, and Adelson himself have been outed by major American news outlets as being the secret force behind the reversal opinion.

In January, the Wall Street Journal?published an expose titled “Justice Department’s Reversal on Online Gambling Tracked Memo from Adelson Lobbyists,” which exposed the reversal opinion as a paid-for piece of capitalistic leverage.

US’s DOJ faces legal onslaught

The messy backstory behind the reversal opinion quickly brought the matter into the courts and also backed the DOJ into a legal corner that figures into the motion by CSIG and NACS to join the case as co-defendants.

While New Hampshire filed its action directly against the DOJ, offering strong legal arguments against the recent reversal opinion, another pro-gambling state, New Jersey, filed a FOIA (Freedom of Information Act) request against the DOJ, seeking information on the links between Adelson’s CSIG and Las Vegas Sands lobbyists and the DOJ’s issuing of the reversal opinion.

To date, the DOJ has defied all requests to turn over any such communications and documentation. The DOJ has also refused, in the New Hampshire matter, to answer important questions about the Wire Act language itself and how its most recent interpretation of the nearly 60-year-old Wire Act came to be.

The battle over “whoever”

One of the most important battles over the reach and intent of the original word has to do with a single word, “whoever.” The word figures prominently in the Wire Act’s primary definition and is also a major part of the motion to intervene just filed by CSIG and NACS. The two groups believe that “whoever” should apply to any conceivable entity and they already submitted a brief to that effect earlier in the case.

However, “whoever” is a well-established term within American law. A response memo quickly crafted by New Hampshire’s legal counsel detailed the long and precise legal meaning of “whoever”: It applies to natural persons, companies, private groups, and the like, but it specifically does not apply to jurisdictions such as a state, county, or municipality. The reason is obvious: Without such a distinction, all those jurisdictions would simply be overrun by any and federal-level edicts, despite American law that awards many legal responsibilities to individual states.

Presiding US District Judge Paul M. Barbadoro has yet to rule on the “whoever” issue. However, Barbadoro has repeatedly instructed the DOJ to offer a written opinion on whether the Wire Act as interpreted under the recent reversal opinion applies to online lottery sales. That necessarily includes the “whoever” matter, but as with New Jersey’s FOIA request, the DOJ has refused to comply to date. And that, in turn, raises another complexity: The DOJ had already announced that the new opinion goes into effect in June 2019, despite the department being unwilling to state exactly what might or might not be legal.

That enduring unknown helped drive CSIG and NACS to file the motion to intervene, despite being on the DOJ’s side. The two groups wrote: “[The DOJ’s] decision to decline to adopt a firm position with respect to whether Plaintiffs are?subject to the Wire Act under the statute’s ‘whoever’ language significantly prejudices the?interests of CSIG, NACS, and their New Hampshire-based members. To ensure that those interests?are adequately represented both in this Court and in any appellate proceedings, and for other?reasons described in the attached Memorandum of Law…” the two groups are now seeking to become co-defendants in the case.