Recent efforts by the U.S. Justice Department to eliminate advertising for online gambling services originated in the U.S. Attorney's office for the Eastern District of Missouri. With Raymond Gruender in command as the district's top prosecutor, the office last year sent a flood of letters to media and broadcast agencies, warning them that the Justice Department considers online gambling illegal and therefore considers the advertising of such services to be an act of aiding and abetting criminal activity. The warning letters were soon followed by subpoenas to portals and media outlets, and in the aftermath, many major TV, radio and Web-based media companies have ceased carrying advertising for Internet gambling services.
Gruender also spearheaded a case against PayPal for illegally processing online gambling transactions for customers in the Eastern District of Missouri and elsewhere--in violation of the Wire Act--between June 2000 and November of 2002. PayPal agreed in July 2003 to pay a $10 million fine.
But now Gruender has left the U.S. Attorney's office. The U.S. Senate last month approved President Bush's appointment of Gruender as federal judge in the St. Louis, Missouri-based 8th U.S. Circuit Court of Appeals, meaning that one of the most aggressive opponents of online gambling in the United States is retiring from a position that empowered him to go after the industry.
We asked attorney Lawrence Walters:
What effect is Raymond Gruender's retiring as U.S. Attorney for the Eastern District of Missouri likely to have on the I-gaming industry?
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"The real impact of this personnel change will depend on whether the U.S. Attorney's Office for the Eastern District of Missouri has pursued online gambling issues as a result of a personal decision by Raymond Gruender or as a result of persuasion and instructions from a higher power."
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Lawrence G. Walters, Esq.: The appointment of Raymond Gruender to the 8th Circuit Court of Appeals has left many in the online gaming industry wondering whether that move will have any impact on his office's investigations into online gambling advertising. Mr. Gruender's office has confronted participants in the online gaming industry in the past, having been the driving force in the investigation of PayPal, ultimately resulting in that company's agreement to cease processing online gaming transactions, a couple of years ago. Gruender's most recent, highly publicized activity has centered on the investigation of various media outlets and advertisers for the online gambling industry. His office has publicly contended that running advertisements for online gaming may constitute "aiding and abetting" federal Wire Act violations by the media outlets that choose to do so.
While it is reasonable to assume that Mr. Gruender's personal promotion to the federal bench might impact his office's future interest in pursing gambling law violations, that will not necessarily be the case. The real impact of this personnel change will depend on whether the U.S. Attorney's Office for the Eastern District of Missouri has pursued online gambling issues as a result of a personal decision by Raymond Gruender or as a result of persuasion and instructions from a higher power. While U.S. attorneys enjoy a substantial amount of discretion in determining which crimes will be prosecuted, and which individuals indicted, that discretion is not absolute. For example, the Criminal Investigations Division in Washington, D.C. may generate various policy directives indicating that a certain type of federal crime should be investigated or prosecuted more zealously or that certain criminal problems exist nationwide, which need attention. Specialists in that type of crime, employed in the head office in Washington, D.C., are often appointed to assist in the prosecution of those types of crimes, when the local prosecutors' offices respond to these initiatives. In other cases, the policy directives could be more informal and take the form of subtle encouragement from superiors in Attorney General John Ashcroft's inner circle.
No information has been publicly released regarding the motivation or impetus for Mr. Gruender's office's interests in online gambling issues. That interest could emanate from Mr. Gruender himself, one of his associates or from a superior in Washington, D.C. If Raymond Gruender was the driving force behind the investigations into online gambling issues, one might expect to see a drop off in the level of interest expressed by his office in pursuing these issues. However, pending investigations are not often dropped or abandoned simply because the individual who commenced the investigation has moved on to bigger and better things. Like most government offices, the U.S. attorney's office sees a fair amount of turnover. However, the new replacements generally pick up where their predecessors left off and complete pending cases. Therefore, even if the recent investigations into online gambling advertising emanated from Mr. Gruender personally, they are unlikely to be abandoned just because a new U.S. attorney takes the helm. However, if Mr. Gruender's successor feels staunchly different about an interpretation of the law or constitutional protections of commercial speech, those investigations could slowly fizzle out.
Another equally likely possibility is the notion that Mr. Gruender's personal interest had nothing to do with the online gambling advertising crackdown, and that instructions for these actions emanated from up high. In such case, his interim successor, Mr. James Martin, would likely receive the same instructions, and no significant impact will be felt by his departure. However, the fact that the Eastern District of Missouri has been uniquely active in prosecuting online gambling law violations suggests that it had a unique interest in these issues over the years. In the event that this interest came from an underling, and not Mr. Gruender himself, such would indicate that no change should be expected as a result of the departure of Raymond Gruender.
One thing is for sure: Raymond Gruender will not have to worry himself with the vagaries of criminal jurisdiction over cyberspace, or constitutional protections afforded to advertisers in the online gambling field, now that he has moved on. That is, of course, unless such a case comes to him in his new position as a judge for the 8th Circuit Court of Appeals.
Lawrence G. Walters, Esq., is a partner in the national law firm of Weston Garrou & DeWitt, with offices in Orlando, Los Angeles, and San Diego. Mr. Walters represents clients involved in all aspects of online gaming operations. Nothing in this article constitutes legal advice. Please contact your personal attorney with specific legal questions. Mr. Walters can be reached at Larry@LawrenceWalters.com, through his Web site: www.GameAttorneys.com or via AOL Screen Name: "Webattorney."