Department Of Justice Sued For Gambling Crackdown Linked To Sheldon Adelson

DOJ official seal

In 2019, the Department of Justice released a 2018 Formal Opinion on the Federal Wire Act. The 2018 opinion was in direct contrast to the 2011 DOJ Opinion on the Federal Wire Act.

Now New Jersey is suing the Department of Justice for failing to provide documents linking the recent DOJ crackdown to Republican mega-donor and casino entrepreneur Sheldon Adelson.

New Jersey Attorney General Gurbir Grewal told media sources that the Justice Department is violating the Freedom of Information Act by not providing the requested documents.

“The residents of New Jersey deserve to know why the Justice Department is threatening to come after a industry we legalized years ago,” AG Grewal also stated that “It’s especially important that we figure out whether this federal crackdown is the result of a lobbying campaign by a single individual seeking to protect his personal business interests.”

Grewal said that the state of New Jersey is currently generating about $353 million in revenue and $60 million in gaming taxes from state-based gambling services. Online gambling makes up a significant part of that additional state income.

Sheldon Adelson is opposed to online gambling suggesting that it will lead to more excessive gambling, but his opponents tend to believe he is opposed to online gambling because it hurts his casino’s bottom line.

The most recent DOJ opinion on the Federal Wire Act and online gambling will take effect on June 14th, 2019. The formal opinion states that all online gambling that involves interstate transactions will not be allowed.

In the first quarter of 2019, the Las Vegas Sands Corporation (Adelson) spent $280,000 USD lobbying the federal government. Disclosure filed with the Senate also shows a $30,000 transaction to Lincoln Policy Group (LPG). LPG confirmed that the payment was related to online gambling but refused to name any DOJ contacts.

The state of New Jersey has also requested information on other lobbying groups such as Darryl Nirenberg of Steptoe & Johnson LLP. Las Vegas Sands (Adelson) paid $80,000 to Darryl Nirenberg of Steptoe & Johnson LLP. The firm has confirmed that they have lobbied Congress on the issue of online gambling but has denied any involvement with the Department of Justice.

You can view the formal Complaint for Declaratory and Injunctive Relief issued by the state of New Jersey by clicking the link above.