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DOJ to Reconsider 1961 Wire Act Opinion?

02/19/2019

After the US Department of Justice (DOJ) recently issued its intention to reverse an 8-year old opinion about the US Wire Act, the online gambling industry in America was put in jeopardy. The 1961 Wire Act was initially passed for the purpose of prohibiting the wiring of funds to support certain gambling activities. 

Based on a reversing opinion, it is assumed the DOJ intends to stop online gamblers from funding their accounts via wires or debit/credit card transactions. That would have a devastating effect on online gambling operations in states like New Jersey and Pennsylvania where said activities are now legal. Reminder: the prior ruling actually served as the basis for many states to legalize online gambling or putting forth legalization legislation, believing the coast was clear to offer residents access to online casinos and sports betting sites

In recent days, the DOJ's anticipated actions came under scrutiny from interested parties, including the Attorney Generals from the aforementioned states. There is reason to believe the DOJ's decision may have been prompted by pressure put forth by Las Vegas Sands Corporation CEO Sheldon Adelson. 

In an interesting twist, the DOJ's new opinion read mysteriously similar to a memo Adelson sent to the DOJ in April of 2017. The memo aggressively asked the DOJ to overturn the 2011 opinion. Based on this new revelation put forth in a recent article published in the Wall Street Journal, there's a very good chance the Department is going to quietly walk away from this mess and allow the states to move forward with online gambling activities. 

The optics of being influenced by Adelson would surely cause a lot of issues for the DOJ, something that would certainly end up running through the federal court system. 

Adelson has long been a staunch opponent of the 2011 opinion because of the adverse effect online gambling has and will have on his land-based operations. As CEO of the Las Vegas Corporation, Adelson is responsible for running major casino resorts in Bethlehem, Pennsylvania, Nevada, Las Vegas and Macau, China. 

As an outspoken opponent of online gambling in the states, Adelson is known to have gone to extraordinary lengths to stop the legalization. That includes donating large sums of money to legislative opponents of online gambling during the 2015 election cycle.

 
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