AG nominee Lynch unlikely to reverse DOJ course of web gambling

WASHINGTON, D.C. -- Attorney general nominee Loretta Lynch has signaled it is unlikely she would reverse a landmark Department of Justice opinion that opened the door to legalized Internet gambling and also sparked a backlash against it.

Lynch said if confirmed she would review the 2011 memo from the department’s Office of Legal Counsel that reinterpreted the Interstate Wire Act of 1961, the federal law that restricts the transmission of wager information.

“It is my understanding, however, that OLC opinions are rarely reconsidered,” she said in a statement to the Senate Judiciary Committee.

“Unless in the course of my review I conclude that OLC’s interpretation of the Wire Act is unreasonable, I do not intend to take any action to suspend or revoke the opinion,” she said.

Lynch, the U.S. attorney for the Eastern District of New York, was quizzed on Internet gambling and dozens of other issues during her Senate confirmation hearing on Jan. 28. She expanded on her views in answers to written followup questions submitted by members of the Judiciary Committee and made public late last week.

In both cases, Sen. Lindsey Graham, R-S.C., took the lead in asking about web gambling, trying to determine if Lynch might ally with him and other lawmakers seeking to reverse the opinion.

Sen. Dianne Feinstein, D-Calif., who said a strong case could be made to make all Internet gambling illegal, also sought Lynch’s views on the topic.

The 13-page Department of Justice memo, completed in September 2011 and made public two days before Christmas that year, concluded restrictions in the Wire Act apply only to sporting events, and not lotteries or other forms of gambling.

Three states have since passed laws legalizing forms of online gambling – Nevada for poker and Delaware and New Jersey for poker and casino-style games. Ten other states, viewing online gambling as a potential source of revenue for starving coffers, are considering similar laws.

The biggest beneficiaries of the change have been state-run lotteries given the green light to sell lottery tickets over the Internet. More than a dozen states offer some online component to their lotteries, according to a recent study by GamblingCompliance, a gaming research organization.

But a coalition formed by billionaire casino owner Sheldon Adelson has launched major campaigns against gambling on the Internet, arguing it raises the potential for money laundering and other crimes, is corrosive as a social matter and also is a bad economic bet for the gaming industry.

Rep. Jason Chaffetz, R-Utah, an Adelson ally, has reintroduced the “Restoration of America’s Wire Act,” or RAWA. It would restore the effective ban on Internet gambling by rolling back the legal landscape to what it was before the Department of Justice issued its opinion.

Graham is preparing to introduce a similar bill in the Senate, although his office has not said when it might be submitted.

In her written answers, Lynch defended the Office of Legal Counsel, whose job is to provide the president and executive agencies with advice on questions of law.

“Because OLC helps the president fulfill his constitutional obligation to take care that the law be faithfully executed, it is my understanding that the Office strives to provide an objective assessment of the law using traditional tools of statutory interpretation,” Lynch said.

In seeking to interpret federal law, Lynch said the office wouldn’t normally seek the views of Congress, state officials, law enforcement or the public.

Lynch, who prosecuted illegal gambling cases as a U.S. attorney in New York, said Graham is free to try to change the law in Congress.

“I would, of course, welcome the opportunity to work with you and other members of Congress to address concerns about online gambling through legislation,” she said.