Ray Lesniak, a former mayor of Atlantic City, long advised that New Jersey should push the lawsuit which led to the PASPA repeal by the Supreme Court.
Former State Sen. Ray Lesniak said a strict interpretation of the 1961 Federal Wire Act by the US Justice Department could weaken New Jersey’s online gambling and sports betting industries. Lesniak, who retired in December after 40-plus years as a state-level politican, said New Jersey lawmakers are wary of the interpretation of the law.
It was not idle talk. Sen. Lesniak called for the New Jersey’s leaders to file a federal lawsuit against the US Justice Department, to challenge their interpretation of the law. Lesniak said the Justice Department might not enforce the new law.
As others have pointed out, last week’s opinion could have been a dog-and-pony show to please major donor Sheldon Adelson, but “the damage done by the opinion is already occurring and [we] can’t wait to see if the Justice Department backs off from its opinion.”
In an interview with NJBiz, a leading business journal in New Jersey, Sen. Lesniak said online gamblers need to be wary of betting on the Internet for the time being. A person could inadvertently violate federal law without knowing it.
Ray Lesniak on NJBiz.com
Sen. Lesniak said, “If I go online to gamble on my phone [and] my internet connection goes through a transmitter out of the state, that can be considered a violation of the Wire Act. Same thing with payment processes.”
While it is unlikely that the US Department of Justice has the manpower resources or will to prosecute individual citizens for violations of the Wire Act, anything is possible if it serves an official’s political standing in the current climate.
90 Days to Become Compliant
More likely, any violations of the Federal Wire Act could be used by Washington officials to justify cracking down on New Jersey’s online gambling laws. Deputy Attorney General Rod Rosenstein gave gaming companies working in regulated online gambling states 90 days to comply with the law.
That means spending the resources to test their online casino and poker servers to assure no gambling crosses state borders. If so, then the companies must invest in the technology to assure betting is done on an intrastate — and not interstate — basis.
Online gambling generated $298 million in revenue for New Jersey in 2018. In only 7 months of sports betting, New Jersey bookmakers received $1.2 billion in action. Of that, roughly $780 million of those bets were handled by mobile smartphones and tablet computers — including bettors who used live in-play betting apps.
NJ Online Casinos Must Test Sites
Senator Lesniak said all those transactions must be tested to assure they comply with the new law. If they do not, then companies like SugarHouse Casino, PokerStars, 888 Poker, Caesars, DraftKings, and FanDuel must assure they comply with the law.
For that reason, Ray Lesniak called for New Jersey to file a lawsuit before the 90-day grace period ends. He said that new opinion already is doing damage to the New Jersey gambling industry.
Lesniak said, “I am urging the State, the Legislature and New Jersey’s casinos to file a lawsuit now and not wait the 90 days because the overhang of the proposed new Wire Act opinion is already damaging internet business investment and operations.”
Stephen Sweeney on DOJ Gaming Laws
Lesniak, with so many decades in the scene, speaks from first hand knowledge. Former political allies like New Jersey State Senate President Stephen Sweeney are concerned about the new law and speaking out about it.
In a statement released this past Monday, Sen. Sweeney said, “The new [DOJ] opinion threatens the significant boost enjoyed by New Jersey casinos, the jobs and state revenues from online gaming and it could have a negative impact on sports betting at our casinos and racetracks.”
Sweeney noted the boosted revenues from online poker, online casinos, and mobile sports betting have helped Atlantic City casinos, but they now are endangered by the DOJ’s harsh new policy. Sweeney added, “We don’t want to lose the hard fought gains that are helping to revive Atlantic City and the state’s gaming industry.”
