Enforcing Online Gambling Laws Is Difficult in US Federal Courts

US Online Gambling Wire Act

US media quickly pointed out that the DOJ opinion on online gambling used language once used by Sheldon Adelson’s lobbyists to justify a ban.

Since the US Department of Justice reversed its opinion on the Federal Wire Act and changed its policy on prosecuting online gambling sites, several legal experts have pointed out that prosecuting online gambling cases will be difficult. The current political environment could have a big impact on cases filed in federal court.

For instance, the DOJ will have to change its prosecution manual to make legal actions possible in the first place. Once that obstacle is surmounted, then federal prosecutors might face a hostile US District Court judge who distrusts opinions from a Justice Department staff influenced by Jeff Sessions, Matthew Whittaker, and Brian Benczkowski.

An understanding of how legal precedent dominates American law is important for understanding US online gambling law. Laurel Loomis Rimon, an attorney with O’Melveny & Myers who once worked for DOJ Criminal Division, said Monday’s DOJ opinion is not the only factor judges would use in deciding a case.

Ms. Rimon said, “An OLC [Office of Legal Counsel of the DOJ] opinion is a legal interpretation that guides [the] DOJ in determining whether to consider certain activity as illegal or not.”

“An enforcement action, which may refer to a criminal investigation or indictment, or a civil lawsuit brought by main DOJ prosecutors or a US Attorney’s Office, requires specific proof of a violation of law by specific individuals or entities, and the bringing of charging documents or a civil complaint in a federal district court.”

Prosecution Manual Needs Updating

In fact, several attorneys noted that the US Justice Department will have to update its prosecution manual to include the new opinion. Of course, with 90 days before implementation, DOJ bureaucrats have plenty of time to update the manual, but something Rod Rosenstein stated in his follow-up memo on Tuesday indicated the matter might not be entirely settled.

Rosenstein’s Tuesday memo stated that the 90-day grace period is designed to “allow for any publuc discussion on the matter”, according to CalvinAyre.com. Laurel Loomis Rimon added, “Revised guidance can certainly be provided within 90 days.”

Daniel Wallach on 2019 DOJ Opinion

Even if the manual is updated, several legal experts pointed out that US District Court judges prefer to use legal precedents instead of DOJ opinions in a real case. Daniel Wallach, one of the founders of the University of New Hampshire School of Law Sports Wagering & Integrity Program, told Casino.org that federal judges look “to precedent to intepret the law”.

That means a federal judge would look to appeals court decisions over the past 8 years instead of the DOJ opinion. US federal gaming laws are not simply a matter of the US Attorney General decreeing new laws.

Wire Act to Be Tested in Court

Anthony Cabot, a UNLV professor and gaming law attorney, seconded Wallach’s opinion. The UNLV legal scholar said the new policy will be tested in court — with one or more lawsuits expected in the next 90 days.

Professor Cabot said, “So, as a matter of law, I am not sure anything will necessarily happen without further litigation, which I believe will ultimately be decided along the reasoning of the 2011 opinion and the circuit court decisions.”

US Politics Could Affect Online Gaming Laws

Daniel Wallach added that the current state of politics in the United States could have an effect on legal decisions. A district court judge might be more likely to cite appellate court decisions instead of Matthew Whittaker’s Department of Justice, because he or she might not trust that DOJ to be fair. Or, as Wallach put it, decisions made in court rooms can be “infected by the political process.”

That is not to say that US District Court judges decide everything on an ideological basis. It means, because the pro-online gambling forces are the ones bringing the lawsuits, they will cherry-pick districts which are known to have a more liberal bent. While that will not assure they get an anti-Trump administration judge, it makes it more likely the case will be handled by a judge appointed by Barack Obama or Bill Clinton.

It might be required that some cases be filed in Washington DC, which is known to be skeptical of the Trump administration’s policies. Anyone listening to the case is going to know that a 50-state online gambling ban is the dream of Sheldon Adelson, CEO of Las Vegas Sands Corp., Republican Party mega-donor, and personal friend of President Donald Trump. In fact, the Wall Street Journal pointed out that the DOJ opinion used material from Sheldon Adelson’s own lobbyists to justify its online gambling decision.

District Judges Might Dismiss DOJ Opinion

In that case, the judge might decide that Donald Trump’s handpicked acting attorney general decided to rule on online gambling to please Sheldon Adelson instead of protect American citizens. If a judge believes that to be the case, then an appellate court decision might look like a sounder legal precedent than an opinion by the current Criminal Division.

Assistant Attorney General Brian Benczkowski, who runs the Criminal Division, was a controversial pick by President Trump. Brian Benczkowski has not prosecutorial background, which throws into question his judgment on such matters.

When Brian Benczkowski was a lawyer at the prestigious Kirkland & Ellis law firm, one of his clients was Alfa Bank, a Russian financial institution which is caught up in the Trump-Russia probe. Democrats pointed out how suspicious it was to place a lawyer for Russian oligarchs in charge of the US DOJ’s Criminal Division — and Benczkowksi recused from the Russian collusion case.

Given that public knowledge, many district judges might not respect the opinion of the current officials at the DOJ — just as many GOP officials and pundits never respected the 2011 Federal Wire Act opinion rendered by Eric Holder’s Department of Justice. It might not be the best way to operate a legal system, but it is the one pro-online gambling and anti-online gambling lawyers deal with.