Department of Justice to Appeal Wire Act Decision
This year, the online gambling industry came under fire due to the Trump Administration deciding to change the Wire Act of 1961 from a 2011 ruling. The act was changed a few years ago, affecting only interstate sports betting. This change allowed states to legalize online lottery gaming, casino and poker options. This year, the Department of Justice ruled that the Wire Act applied to all interstate gambling. Thankfully, for the gaming industry, a federal judge ruled in June in their favor. However, the DOJ is not ready to back down and have started an appeal process.
A Little Back Story
In 2011, the Wire Act of 1961 was changed by the Obama Administration Department of Justice due to its age. At the time, the Act was created it was done so to affect gang activity and money laundering. By 2011, the changes help to bring about a legalized format for online casino and poker gaming. States like New Jersey, Delaware and Nevada began what are now lucrative online gaming industries.
As with any legal change, there will be opponents. For online gambling, some casino operators as well as conservatives were strongly opposed to the option. Take Sheldon Adelson for example. The CEO of the Las Vegas Sands wants no part in online gambling and spent millions of dollars in efforts to shut it down. He was not successful, however he has not stopped trying.
Now with Trump in office, the DOJ decides they are going to revisit the Wire Act and make changes that will affect the online gambling industry as a whole. The Act now reportedly bans all forms of interactive gambling. This would include the lottery, of which several states offer, as well as online casino and poker gaming. Delaware, Nevada and New Jersey currently offer shared player liquidity for iPoker sites.
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The backlash was instant as operators and lawmakers spoke out against the DOJ’s decision to change the Wire Act with no warning. Many felt that Adelson was behind the decision with Attorney Generals, including the one in New Jersey, requesting documentation on the change to see if Adelson was involved.
In June 2019, a New Hampshire District federal judge ruled in favor of the state in a case against the Department of Justice, stating that the Wire Act only applies to sports betting and not other forms of interstate gaming. The DOJ had yet to make a move until this week.
The Department of Justice has now filed their intent to appeal the decision made by the district court on the Wire Act. The DOJ will now have to formally petition the First Circuit in order for their appeal to be heard. Once that is complete, the First Circuit will then decide the next step in the case. Court will be out until October, so no steps will be taken until that time.
A response has already been issued by those involved in the online gambling industry, iDEA Growth, an online gambling lobbying group, has stated that they hope instead of engaging in a protracted, expensive and ultimately unsuccessful legal fight, the DOJ will use the opportunity to negotiate a settlement that will focus the resources of the Department and the Wire act to the right targets which are the unlicensed and illegal offshore online gambling operators. Such operators do not provide jobs for the US nor do they generate any tax revenues, plus provide protections for consumers in the nation.