Diary

Reversing Justice Ruling on Wire Act a Major Mistake

Wire Act issues comes up in confirmation hearing on Jeff Sessions
Wire Act issues comes up in confirmation hearing on Jeff Sessions
The Wire Act, as it is currently interpreted regarding online state-based regulated gambling, is correct and should be upheld by the Department of Justice under the Trump Administration as it was handed down in 2011 by President Obama’s Attorney General, Eric Holder. Testifying before the Senate during his confirmation hearing as Trump’s nominee for Attorney General, Sen. Jeff Sessions (R-AL) said he would, if confirmed, revisit the current interpretation of the Wire Act handed down in 2011.

After the Office of Legal Counsel issued the interpretation in 2011, there have been several legislative attempts to overturn this, including the “Restoration of America’s Wire Act” (RAWA) that would federally ban internet-based state regulated gambling. The House Oversight Committee, under the chairmanship of Rep. Jason Chaffetz (R-UT), held a hearing designed to build support for RAWA. By the end of the hearing, opponents of RAWA had clearly made the stronger case, outlining many Constitutional problems, including violation of the Tenth Amendment, in using Congressional authority to federally ban state-based internet gambling. Not only was it clear that state’s rights were violated by RAWA, but there were also serious Second Amendment concerns in federal authority banning state-based gambling could also be used to prohibit internet sales of ammunition and firearms in all 50 states.

Contrary to the claims of RAWA supporters, who claimed their bill was “restoring” the Wire Act banning state-based Internet gambling, the law never had such a purpose. the Wire Act was signed into law in 1961 by President John Kennedy to go after organized crime being heavily involved in sports betting. The Internet had not yet been invented, nor had anyone imagined the law banning casino-style gambling online either.

“However, the Wire Act was originally intended and long understood as a narrow and targeted weapon to assist the states in preventing organized crime from taking bets on sports—not as a broad federal prohibition that would prevent states from legalizing online gambling within their borders,” Michelle Minton writing for the Center for Gaming Research at the University of Nevada, Las Vegas about the Wire Act.

It is also clear that interpreting the Wire Act to prohibit state-based gambling conflicts with the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 which prohibits the processing of payments for illegal internet-based gambling, but it does not prohibit interstate Internet gambling where the betting in payments take place in one state.

Contrary to the claim the 2011 interpretation changed the meaning of the Wire Act, the ruling of the Office of Legal Counsel restored the Wire Act to its original meaning. The Wire Act was never intended to federally ban any gambling other than that related to sports betting.

The issue has come up in Sen. Sessions’ confirmation hearings on his appointment as Attorney General in the incoming Trump Administration. Sen. Lindsay Graham (R-SC), a chief sponsor last year of RAWA, questioned nominee on the issue. Graham asked Sessions his view on the 2011 interpretation of the Wire Act, and whether he would overturn or uphold this interpretation as Attorney General. Although he opposed it at the time, Sessions said he would study the issue before making a ruling on it after taking office as Attorney General.

The effort to pass RAWA has been a one-man crusade of Sheldon Adelson, the owners of brick-and-mortar casinos in Las Vegas who has bankrolled Republican candidates with hundreds of millions in campaign contributions. As a result, those few Republicans in Congress and the Senate have sponsored and sought to advance RAWA. Many Republicans, who have been the strongest opponents of the bill, have opposed it because it violates the Tenth Amendment, which clearly states laws and regulations on gambling are to be decided at the state level.

Three states – New Jersey, Nevada, and Delaware – have legalized and implemented state-regulated Internet gambling. Representatives of the states testified before the House Oversight Committee hearing on RAWA chaired by Rep. Chaffetz, and outlined how the use of technology allows those states to prevent citizens from other states, where online gambling is illegal, to participate in gambling from those states where it is legal. Supporters of RAWA argued that if any state legalized Internet-based gambling, it would force all states to tolerate it. However, it was clearly demonstrated otherwise in the hearing.

That Sen. Sessions pledges to study the issue before handing down a ruling is a good sign. He should see, as others have, in thoroughly examining the interpretation of the Wire Act, that the Office of Legal Counsel got it right in 2011 in taking the position that the Wire Act does not prohibit state-based Internet gambling.