NJ to US DOJ: Intra-state i-Gaming is permitted under Federal law
July 24, 2011 - New Jersey lawmakers are telling the US Department of Justice that their state has every right to enact intra-state Internet gambling, and that their efforts are permitted under current federal law.
In a letter to US Attorney-General Eric Holder, NJ Senator Raymond J. Lesniak - one of the sponsors of New Jersey’s proposed sports betting and Internet gambling legislation - stated that “(t)he State of New Jersey should not be impeded in any manner from exercising our rights under our state constitution and under federal law.”
Earlier this year, New Jersey’s legislature overwhelmingly voted for a bill to permit casinos in Atlantic City to offer intra-state Internet gambling on casino games and poker. Though Gov. Chris Christie vetoed the bill, both he and the legislature indicated a desire to make New Jersey the first state in the US to legalize Internet gambling. A new bill is expected to be introduced sometime later this year.
Lesniak’s letter was in response to one sent a week earlier to USAG Holder by US Senators Harry Reid and Jon Kyl. Both Reid and Kyl insisted that the DOJ crackdown on efforts by states to pass intra-state Internet gambling legislation, claiming it violated federal law including the Wire Act of 1961.
Lesniak pointed out that under the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA), intra-state Internet gambling was permissible, and cited the specific passage in the law’s text:
“The term ‘unlawful Internet gambling’ does not include placing, receiving, or otherwise transmitting a bet or wager where…the bet or wager is initiated and received or otherwise made exclusively within a single State.”
Lesniak also pointed out that “intermediate routing” of Internet network traffic across state lines by Internet service providers (ISPs) did not violate either UIGEA or the Wire Act. UIGEA specifically states that intermediate routing did not affect the location of the bet, Lesniak wrote, and the Wire Act was intended for criminal enterprises using telecommunications to conduct illegal interstate sports betting, and was not intended for state-licensed and regulated intra-state gaming.
Both Reid and Kyl voted for UIGEA with the intra-state exemptions included in the final text of the law.
Lesniak also contradicted assertions by Reid and Kyl that all Internet gambling, including intra-state, was illegal.
“Were you to accept Sens. Reid and Kyl’s letter on its merits, you would have to prosecute the Nevada Gaming Board, which this year approved sports betting via mobile Internet within the confines of the state of Nevada. Nevada has also approved other forms of Internet and remote wagering on casino games, poker and sports within Nevada by firms like Las Vegas Sands and Station Casinos.
Lesniak went on to write, “(f)or that matter, New Jersey and 37 other states would also have to be prosecuted for permitting online wagering on horse races, which has existed for years.”