On his first day as CEO of the American Gaming Association, Bill Miller received a gift, courtesy of Las Vegas Sands Corp.
Just as he was settling into the job, word landed that the U.S. Department of Justice had reconsidered its 2011 opinion of the Federal Wire Act. The decision immediately called into question seven years of gaming industry advancements, including online gambling activities in three states, the sale of lottery tickets over the Internet, and, potentially, mobile sports wagering, among other activities.
Remember Bruce Willis’ line from the movie Die Hard, when he dropped a terrorist’s body from the Nakatomi Plaza onto an unsuspecting police car?
“Welcome to the party, pal,” Willis’ character, John McClane, shouted from the building.
Bill Miller is driving the police car.
Miller received his initial lesson on the complications and fractures within the gaming industry on Day One. AGA member Las Vegas Sands – and, particularly, its company chairman and CEO Sheldon Adelson – hates Internet gaming. Adelson and the casino giant funded a years-long effort to erase the 2011 Justice Department opinion.
In 2014, the Washington, D.C.-based AGA took a position favoring legalized Internet gaming, but the board – through chairman Jim Murren – told then-AGA CEO Geoff Freeman to dial down the lobbying and advocacy efforts on behalf of legalizing the activity. Those efforts, the board said, were fracturing the AGA’s membership.
As of today, the AGA’s stance on Internet gaming legalization officially remains neutral.
The new Justice Department opinion, however, has Las Vegas Sands’ fingerprints all over it.
A firm headed by Washington D.C. attorney Charles Cooper, who has worked for the Adelson-backed Coalition to Stop Internet Gambling, wrote a detailed memo outlining changes to the Wire Act, which reached the Justice Department’s Office of Legal Counsel in 2017. That memo was the basis for the 23-page opinion dated Nov. 2, 2018.
Cooper confirmed that himself to the Washington Post last week, telling the newspaper the decision “accords entirely with the analysis my firm undertook and I shared with the DOJ.”
For now, it’s unclear how the new Wire Act interpretation will ultimately impact gaming operations throughout the country. Deputy Attorney General Rod Rosenstein issued a memorandum in January delaying implementation of the opinion for 90 days while the Justice Department decides how it will handle any Wire Act prosecutions.
Multiple law firms with specialized gaming practices have weighed in.
Some believe the new opinion is over-reaching and could wipe out many of the technological advancements utilized in the last seven years: any situation, for instance, where gaming information is transmitted over the Internet.
Eilers & Krejcik Gaming explored all the opinions on the Wire Act and offered this advice:
“Our survey of relevant industry stakeholders revealed a deep schism between two camps: One camp believes the (Office of Legal Counsel) opinion is focused on interstate online gambling products but leaves room for intrastate online gambling products. The other camp believes that the opinion poses an immediate threat to any product at the intersection of gambling and the Internet,” wrote analysts Chris Grove and Chris Krafcik.
Last week, while much of the gaming industry was attending the ICE London 2019 gaming conference, New Jersey and Pennsylvania launched a broadside at the Justice Department’s opinion, which included a Freedom of Information Act request seeking all records pertaining to the Justice Department’s communications with Las Vegas Sands and its lobbyists concerning the Wire Act opinion.
For now, the AGA isn’t saying much beyond a Jan. 18 statement that it would “work with all stakeholders to preserve the ability of states and Tribes to regulate gaming, and we encourage (the Justice Department) to investigate and shut down illegal, unregulated gambling operators who prey on consumers.”
On Monday, Miller outlined the gaming industry’s priorities for 2019 in a memorandum to all members of Congress.
The AGA highlighted six key policy areas: Growing legal sports betting in states and tribal markets with opposition to any federal oversight; a review of anti-money laundering regulations and continued compliance by the industry; updating gaming tax policy, including an increase to the jackpot reporting threshold from $1,200 to $5,000; immigration policy; travel and tourism matters, including federal security funding for Las Vegas; and opposition to renewed efforts by the Department of Energy to revive Yucca Mountain – located just 90 miles from Las Vegas – as a repository for nuclear waste.
For now, the reinterpretation of the Federal Wire Act didn’t make the cut.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
