Earlier this year, states that offer online casino, poker and lottery gaming were rocked as the United States Department of Justice decided to reinterpret the Wire Act. The Wire Act was created in 1961 and not updated until 2011 by the Obama Administration. In 2011, changes made allowed for states to individually legalize and regulate online gaming. This year, the DOJ under the Trump Administration decided to change the Wire Act to apply to all formats of interstate gambling rather than just sports betting.
This change could affect online lottery gaming among other options in the states. New Hampshire acted quickly and filed a lawsuit against the DOJ. The state then won in federal court as a judge ruled the Wire Act only applies to interstate sports betting. Now, the DOJ has announced that the Wire Act will not be enforced until 2020 at the earliest.
DOJ Direction
A memo was sent out this week by the DOJ directing that action will be held off for their reinterpretation of the Wire Act. The memo was initialed by Jeffrey Rosen, the Deputy Attorney General. The memo stated in part:
On June 3, 2019, a federal district court in New Hampshire issued an opinion holding, inter alia, that Section 1084(a) applies exclusively to sports gambling. The Department is evaluating its options in response to this opinion. Accordingly, the forbearance period announced in the Deputy Attorney General’s February 28 memorandum is hereby extended from June 14, 2019 to December 31, 2019 or 60 days after entry of final judgment in the New Hampshire litigation, whichever is later.
Lawsuit Pending
Right now, the state of New Hampshire has a pending lawsuit awaiting an appeal potentially by the DOJ. It is believed that the DOJ will appeal the most recent ruling in the case.
It appears that potentially no one is safe from prosecution based on the new interpretation of the Wire Act. The Department of Justice apparently thinks that any state lotteries, online casinos and other operations that have violated the Wire Act in the past or even now could be prosecuted for the violations.
It is really unclear as to how the issue will advance at this point. New Hampshire is not giving up and now they seem to have the law on their side, as least for now. Many have suggested that anti-gambling proponents such as Sheldon Adelson have a hand in the DOJ’s decision to revise the Wire Act. The Attorney General in New Jersey asked for documentation involving the decision as he and others felt that Adelson played a role.
For now, we will just have to wait and see how the legal proceedings play out. Hopefully, the DOJ will decide to void their 2019 opinion and move back to the previous ruling from 2011. This way, online gaming operations in the US are safe from prosecution and states can continue to be fruitful in their online gaming endeavors.
