DOJ Fires on North Dakota

DOJ Fires on North Dakota

full article can be found at IGamingNews.com

The U.S. Department of Justice sent a letter to the attorney general of North Dakota last week stating that a proposed bill that would license and regulate online poker could be in violation of federal laws.

Addressed to North Dakota Attorney General Wayne Stenehjem, dated March 7 and signed by U.S. Deputy Assistant Attorney General Laura Parsky, the letter mirrors those sent to the Nevada Gaming Commission and the U.S. Virgil Islands after those jurisdictions passed laws regulating the online gaming industry.

The DOJ cites three federal statutes that the state could be violating if it moves forward with the legislation: the Wire Act, the Travel Act and the Anti-Gambling Act.

Legal experts who follow the I-gaming industry say the DOJ isn’t standing on solid ground.

Attorneys Anthony Cabot, Frank Catania, Pat O’Brien and Allyn Jaffrey Shulman testified last week before the North Dakota Senate, and all four were adamant that regulated online poker in North Dakota would not violate any federal laws.

“They (the DOJ) are real good at writing letters and threatening jurisdictions without having any basis of case law,” O’Brien said during a press conference last week.

Shulman said that a state wanting to regulate online poker is above refute from the Wire Act.

“I would stake my reputation on the fact that the Wire Act doesn’t apply to online poker,” she said. “I said that six years ago, and I stand by that today. There is a clear definition of the Wire Act as it applies to sports betting, and online poker doesn’t meat that definition.”

Catania said the Anti-Gambling Act would be a moot point because it allows the federal government to bring charges only against individuals who are operating gambling services that are in violation of state laws.

“If North Dakota, or a similar state, passed a bill that allowed for the activity to be licensed and regulated,” Catania pointed out, “then individuals would hardly be in violation of state laws.”

The attorneys also argued that the Travel Act applies only to the distribution of funds gained from “illegal” activities. Therefore, if Internet poker was deemed legal in the state, any funds derived from the activity would be perfectly legal.

The quickness of the DOJ’s response to the North Dakota bill–it hasn’t even gone before the full Senate yet–caught some in the industry off guard, but no one was surprised by the contents of the letter.

“They can say what they want, but in 10 years they haven’t brought one non-sports betting operator up on charges for violating the Wire Act or any of these other statutes,” O’Brien explained.

Despite assurance from numerous attorneys, the DOJ letter has cast some doubt on the bill’s chances of passing.

Stenehjem told the Associated Press that he’s convinced the DOJ means business.

“At one point or another, we are going to be, if this law is passed, in court, in a very protracted and potentially expensive lawsuit to defend the statute,” Stenehjem said.

Stenehjem added that no online poker activity will be permitted in the state until the courts weigh in with their opinion on the law.

“Before I would be willing . . . to establish an Internet gaming program in North Dakota, I would have to have a ruling from a court indicating that in doing so, we’re not violating [federal law].”

The Senate Judiciary Committee, which held a hearing on the bill last week, is scheduled to vote on the bill Tuesday. The bill was amended to include a “defense fund” created for the sole purpose of financing a court challenge if the DOJ were to bring a lawsuit against the state.