Biden Administration Likely to Boost Online Gaming, Sports Betting

Biden Administration Likely to Boost Online Gaming, Sports Betting article feature image

Salwan Georges/The Washington Post via Getty Images. Pictured: President-elect Joe Biden.

President-Elect Joe Biden’s incoming administration is likely to boost regulated online gambling- largely because it’s given no indication it would seek to curtail it.

Biden mostly avoided the topic of legal gambling on the campaign trail, focusing instead on the COVID-19 pandemic, the economy and a host of other issues. Gambling is not mentioned among several dozen topics listed on his campaign website.

Biden has reportedly said he doesn’t support a Trump Administration decision to reinstate a more stringent view of the Federal Wire Act of 1961, according to Bloomberg’s Chris Palmeri. The reinterpretation of the decades-old law sparked an ongoing legal battle that threatens the legality of online gaming.

The incoming administration has also given little word on federal sports betting legislation. A bipartisan sports betting regulation bill has floundered with little traction in Congress and, with political control of the Senate still undetermined heading into the 2021 term, it seems any legislation faces an uncertain future at best.

Ending the restrictive Wire Act opinion and staying out of federal sports betting legislation have been largely supported by the legal gaming industry. Biden’s action, perhaps through inaction, would be the best decision in the industry’s eyes, especially after four at times tumultuous years under Trump.

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Wire Act Details

Though Biden’s attorney general nominee has not been announced publicly, it’s safe to say he or she will rescind the lawsuit that threatens the future of internet gambling.

Biden severed as vice president during the Obama administration, which determined in 2011 that the Wire Act applied narrowly to interstate sports betting, not online gaming in general. While this means states with legal sports betting still can’t share players across state lines, it allows online casino operators to, for example, accept players in one state and have a computer server in another.

Under a series of attorneys general, President Donald Trump sought to restrict online gambling through the auspicious of the Wire Act of 1961, a measure pushed by the Kennedy administration that was ostensibly designed to stop organized crime. The Trump Justice Department rescinded the Obama Administration’s interpretation, and instead determined the nearly 60-year-old law's prohibitions on cross-state gambling applied to not just sports betting but online gaming as well.

This broad interpretation threatened the legality of not just the states with legal online poker and casino gaming, but online lottery sales as well.

Officials in New Hampshire, home to the first modern U.S. state lottery, challenged the ruling in court shortly after it was announced in 2019. A district court judge ruled in favor of the plaintiffs, staying the implementation of the Wire Act’s revised interpretation. Under Attorney General William Barr, the Justice Department appealed the ruling, which is now before an appellate court.

Meanwhile, the inexplicable rationale for the revised Wire Act opinion drew scrutiny, especially considering Trump’s relationship with Sheldon Adelson, an outspoken online gambling adversary and one of the president’s biggest donors. In a separate move independent of the court challenge, New Jersey Attorney General Gurbir Grewal sued the DOJ for what he said was a failure to explain Adelson’s potential influence on a Justice Department matter.

With Barr set to be removed from his position when the new administration takes office in January, the lawsuit loses its biggest defender. The new attorney general seems like he or she will support the 2011 opinion of the bill and likely withdrawal the government from the lawsuit.

Sports Betting Legislation

A federal sports betting bill never gained much traction under Trump and seems unlikely to do much more under Biden. Introduced a few months after the Supreme Court struck down the federal sports betting ban in May 2018, the bill would require certain minimum standards for each state that choose to legalize wagering.

First introduced by then-Senate President Pro Tempore Orrin Hatch, a sponsor of the original federal sports betting ban, as well as Senate Minority Leader Chuck Schumer, the bill was largely ignored over by Congress. A follow-up version, this time sponsored by Schumer and Mitt Romney, Hatch’s replacement in the Senate, has likewise gained little support.

Despite bipartisan backing from Schumer, the Senate’s top Democrat, and Romney, a former Republican presidential nominee, there seems little interest or political capital to regulate wagering at the federal level.

Roughly two-dozen states have passed sports betting laws already, all of which seem disinclined to support any federal intervention. Leading advocacy groups such as the American Gaming Association have explicitly asked Congress to stay out of state-level sports betting decisions.

The Biden administration seems more than willing to acquiesce the request. Along with Congress’ relative gambling ambivalence, Biden seems disinclined to waste political capital on such a bill, especially after it was virtually absent from any of his campaign positions.

Additionally, if Republicans win either of January’s two Georgia Senate runoff races, they will maintain control of the Senate which, against a Democrat-controlled House of Representatives, makes passing any legislation that much more difficult, even with bipartisan sponsors.

That could be good news for the gaming industry and sports betting in particular, which has largely supported state-by-state autonomy toward sports betting decisions.

More importantly, the existential threat facing online gaming posed by another four years of the Trump administration seems like it will fade away under Biden.

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