Summary: As the DOJ recently issued a new opinion on the Wire Act, making all interstate online gambling illegal, the PA Gaming Control Board has issued directions to operators to prepare for the new industry.
Just a few days ago, the online gambling world was shocked to find that the United States Department of Justice had decided to issue a new opinion on the Wire Act of 1961. The act was originally changed in 2011 by the Obama Administration to allow for online gambling, with interstate options open to casino and poker options online, but not sports betting. Now, the DOJ has ruled that all interstate online gambling is considered illegal. As Pennsylvania operators are set to begin offering online gaming services this year, the state’s Gaming Control Board has issued a statement and directions on the matter.
After the new Wire Act opinion was made public, the Gaming Control Board in Pennsylvania issued a public statement on the matter. They reaffirmed their stance on the gambling expansion act, and stated that it was in line with the old opinion as well as the new opinion involving the Wire Act.
Now, a new memo has been issues that has the Gaming Control Board working to make sure that their online gambling operations will follow federal guidelines. According to PlayPennsylvania, the Gaming Control Board and the casinos of the state have been in communication on the matter. A letter was sent by the Board to operators with directions given on how to proceed.
The letter was written by Kevin O’Toole, the Executive Director of the Board. In the letter, it speaks on the memo written by Rod Rosenstein, the United States Deputy Attorney General. In the memo, Rosenstein talks about several things, including the fact that the DOJ has plans to create prosecutorial guidelines on the matter. They will also be giving a 90-day time frame for existing regulated gambling operations to get in line with the new opinion.
In the letter by Mr. O’Toole, he says that in regard to online or mobile gambling, operators must be sure that any transmission of bets and wagers, ,payments and credits of bets or wagers, along with information regarding the placing of wagers and bets must not cross state lines. Operators have to complete their due diligence to ensure their operations, every aspect, takes place within the state.
The casinos have 30 days in which to provide a plan to the Board that explains their plan to make sure that their online sports betting and casino operations will function within the borders of the state.
What Should Be Considered?
So, what will operators need to do in order to be in compliance? What steps will need to be taken? It seems every aspect of the online gaming operations will need to be reviewed to ensure that nothing takes place outside of Pennsylvania.
Take for example servers for operations. Many casinos in Pennsylvania operate online casinos in New Jersey. They already have servers located in Atlantic City and could easily operate Pennsylvania iGaming from there. But, this would be interstate activity, and that is no longer allowed. Operators will have to make sure that servers are located in the state.
Any consideration to shared online poker player liquidity will have to be done away with. New Jersey, Delaware and Nevada already offer shared player liquidity when it comes to online poker, but that is now illegal. Any ideas by operators to do this with online poker will have to be shut down until changes are made via the Wire Act or other legislation.
Live dealer games will also have to be considered. Studios or gaming floors for game play will have to be located in Pennsylvania and not outside the state.