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DoJ Wire Act Opinion Challenged in New Proposals

Great Seal of the United StatesA Bill has been introduced into the US Senate challenging the Department of Justice´s 2011 opinion that the Wire Act only applied to online sports betting.

On September 13, 1961, President John F. Kennedy signed the Federal Wire Act into law. The Act prevented betting on sporting events by wire communication (telephone and telegram) in order to restrict the mafia´s illegal gambling operations.

Fifty years later, in response to a request about the legality of online lottery sales, the Department of Justice (DoJ) issued an opinion that the Federal Wire Act only applied to bookmaking or wagering pools with respect to a sporting event.

The 2011 opinion led to an expansion of online lotteries throughout the US and, significantly for online poker players, the regulation of online poker in Nevada, Delaware and New Jersey. Now three Republican Senators are aiming to overturn the DoJ´s opinion and prohibit the funding of unlawful Internet gambling.

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S.3376 – RAWA Under a Different Name

The untitled bill has been introduced into the Senate by Arkansas Republican Senator Tom Cotton and co-sponsored by two familiar names in anti-online gambling circles – Senator Mike Lee (R-UT) and Senator Lindsey Graham (R-SC).

According to information about the bill posted on the PPA website, S.3376 seeks to ensure the integrity of laws passed by Congress are not undermined by legal opinions. The bill only has one section – one that repeats the objectives of the failed “Restoration of Americas Wire Act (RAWA)” in a single sentence:

The Memorandum Opinion for the Assistant Attorney General of the Criminal Division of the Department of Justice, dated September 20, 2011, shall have no force or effect for the purposes of interpreting section 5362(10) of title 31, United States Code.

The Implications of S.3376

If passed, all regulated online gambling in the US would be illegal. There are no carve-outs or exclusions for special interests, so it would not just be online poker that would be made illegal, but also online lotteries, online horse racing and online daily fantasy sports betting.

Because of these implications, there is likely to be fierce lobbying against the bill from the online gambling industry. It will also be the case that, should the bill pass, the DoJ would be responsible for enforcing it – despite being of the opinion that the Wire Act does not apply to regulated non-sports gambling.

One contributor to the 2+2 forum has suggested that an anti-gambling president (or one funded by anti-gambling interests) could order the Attorney General to forcibly close regulated online gambling sites; although, if the law were to pass, many would likely withdraw voluntarily as was the case following the passage of UIGEA in 2006.

The Likelihood of Passage

In reality, S.3376 is unlikely to become law – even though it will be strongly supported by politicians who have benefitted financially from the patronage of anti-online gambling billionaire Sheldon Adelson. States that have introduced online lotteries would lose important revenue streams if the bill was passed, and consequently “gambling-neutral” Senators will oppose its passage.

The Poker Players Alliance (PPA) has warned that the proposals could be added to a must-pass bill during the coming lame duck session, and slipped quietly through the back door as UIGEA was in 2006. However, now that S.3376 is on the gambling media´s radar, any forward movement of the bill will be red-flagged and brought to the attention of pro-gambling lobbyists.

Previous attempts to sneak through RAWA-esque legislation have failed. There is no reason to believe that Tom Cotton´s latest attempt will be any more fruitful.

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