The Impact of COVID-19 and State Legislation on Gaming: Q&A w/ James Trusty

By Morgan Goldstein, GW Law 2L

As a white-collar litigator and former
prosecutor, James (“Jim”) Trusty has a
unique perspective when it comes to sports
betting. Prior to joining the firm Ifrah Law
PLLC, Jim most recently served as Chief of
the Organized Crime Section at the United
States Department of Justice. He now focuses
on matters involving white collar crime,
including RICO, the Computer Fraud
and Abuse Act and the Money Laundering
Control Act of 1986. His past experience
allows him to identify areas of potential
concern that may arise for organizations and
individuals in the gaming industry.

We had the privilege to speak to Jim re-
garding how legislation in different states and

COVID-19 could impact gaming, where
he sees online betting in 5 years, and why
Ifrah Law is a leader in the sports gaming
industry today.
Question: Did you play any betting games,
like trading cards or marbles in your youth/
teen years?

Answer: Actually, no. Other than play-
ing checkers and card games with my dad

when I was a little kid, I spent most of my
time playing sports or running around the
neighborhood in a pack of suburban kids.
The closest I got to gambling was a card
game called “Casino” with my grandfather!
Q: What do you find most interesting
about gaming?
A: I’m always impressed by the amount
of work people put into being successful –
their knowledge of the odds, mathematics,
or, in sports, their immersion into predictive
material with regard to players or teams. To
do it right, there is an awful lot of homework
Q: What are some ways that white collar
litigation intersects with gaming?
A: The biggest intersection stems from

knowing how prosecutors and law enforce-

ment agents investigate cases, and how they
view a person (or firm)’s behavior. It’s not
that there is a constant flow of criminal cases
involving gaming, but for many operators in
this expanding sector there is still significant
risk. So, having experience as a prosecutor
and as a white-collar litigator lets me step
outside the client’s perspective and identify
areas of potential concern.
Q: How do you see COVID-19 impacting
sports betting?
A: The immediate impact was that sports
were shut down for several months. I’m not

sure that English darts and soccer in Kazakh-
stan were a good recipe for long-term sports

betting. But with U.S. sports starting to come
back, and with more lawful venues for sports
betting and mobile betting (reopening), I
think the trajectory is right back on track for
higher participation, expansion, and profit.
Q: What are your thoughts on the current
state legislation being passed for sports betting?
A: COVID-19 is going to have some
serious long-term consequences for state
treasuries. My biggest concern is that States
will view sports betting as a panacea to solve
their problems. I’m all for expansion and
consumer protection (i.e., regulation) but I
am worried that the legislatures are thinking
there is a bigger profit margin than there
actually is in this industry.

Q: What cross-border issues do you see aris-
ing from sports betting?

A: The biggest cross-border issue that

arises in this field is that of federal enforce-
ment of the Wire Act. When the Depart-
ment of Justice came up with this ridiculous

re-write of their policy on the Wire Act, it
did not directly change the playing field for
sports betting, but it signaled the possibility
of federal prosecution of licensed, or even
state-sponsored, gaming activity. It was just
a poorly conceived and poorly delivered
policy statement that clouds the equation
for licensed businesses and their investors.

James Trusty

Q: Where do you see online sports betting
5 years from now?
A: Through the roof. The younger crowd
is not looking to regularly take a bus to a
casino to place their bets. They have such
comfort and instinct with mobile phone
apps that it is truly their preference to bet
online. It’s not exclusive, because older folks
enjoy it, too. But it seems to be a strong
preference for the younger generations. It
does not “cannibalize” the brick and mortar
venues. In fact it might bring those younger
people into those places from time to time.
Q: How is Ifrah Law leading the way in
sports gaming, and what kinds of clients does
the firm work with in this part of the industry?
A: Lots of law firms can crank out a memo
assessing federal or state laws that relate to
gaming, and there is always some value to
that kind of approach. However, our team at
Ifrah Law has decades of expertise in this field
– we know the federal laws, the state laws,
the regulators in various states, the licensing
process. In addition we know the operators
in this realm—everyone from casino owners
to payment processors to app developers.

It comes down to having practical and op-
erational knowledge. We also have a long

history of identifying business opportunities,
best practices and connections throughout
the entire industry. It’s also critical that our
clients, from Hong Kong to Costa Rica to
Philadelphia, recognize our willingness to get
on the phone or a video conference during
hours that work best for them.