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DOJ Extends Compliance for Wire Act and Continues Appeal

This year, the Department of Justice under the Trump Administration decided to reinterpret the Wire Act of 1961 from the 2011 ruling by the DOJ under Obama. The change placed all interstate online gambling as illegal instead of just sports betting as previously ruled. Operators were to be in compliance of this change rather quickly and of course, there was a pushback. A legal fight ensued and the DOJ is having trouble with their reinterpretation. They have now stated that the year end deadline for compliance has been changed yet again and is now June 30th 2020.

A Little History

To rewind a bit, back in late 2011, the Department of Justice decided to reinterpret the Wire Act to only apply to sports betting rather than all gambling. This helped states like Nevada, Delaware and New Jersey to offer iGaming. Just recently, we saw the addition of Pennsylvania and West Virginia along with Michigan just a few days ago.

Back in January, the DOJ issued a new reinterpretation where the Wire Act applies to all types of online gambling, not just sports betting. This caused operators in the US to worry about their gaming industries, from lottery ticket sales to online poker.

Constantly Changing Deadlines

When the new interpretation was issued, a deadline for compliance was set for April 15th, 2019. However, by March, the deadline was changed to June. Then by June, the New Hampshire Lottery Commission won a case against the DOJ where a judge ruled that the Wire Act still applies only to sports betting.

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The DOJ decided to appeal the ruling and it seems the case will make it to the United States Supreme Court. Due to the appeal, the DOJ just decided to extend the compliance deadline yet again to six months from now.

Moving Forward

When the DOJ ruling became an issue, states like Pennsylvania were hesitant to move forward in launching online gambling services. The state had passed online gaming legislation in 2017 and this year were ready to launch. But extra time was taken by regulators to ensure that the new industry would be in line with the new interpretation before going live with services. This caused a delay in online casino as well as online poker sites launching in Pennsylvania.

With the recent ruling in favor of New Hampshire in the case of the Wire Act and the compliance dates moved by the DOJ, states like Michigan and West Virginia can relax a bit as they prepare to launch online gambling services. Lawmakers in other states that are contemplating similar legislation will hopefully feel more at ease as well moving forward.

For now, we will continue to monitor the appeal process of the Department of Justice as well as if the case moves forward to the United States Supreme Court. It is interesting to note that if Trump is not reelected in 2020 and the democrats are back in power, it is likely the Wire Act interpretation will revert back to the 2011 status and there will no longer be any potential problems for online gaming operators regarding the Wire Act.

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