New Bill Attempts to Overturn DOJ Wire Act Opinion

US PokerA new Bill to overturn the Department of Justice´s 2011 interpretation of the Wire Act has been introduced into Congress and referred for consideration.

The Bill “to clarify the effect of a Memorandum Opinion” (HR 6453) is similar in RAWA-esque substance and brevity to the proposals introduced into the Senate by Arkansas Republican Senator Tom Cotton [geolink href=””]back in September[/geolink], and might as well be considered a companion Bill.

It has been introduced by Pennsylvania Representative Michael Fitzpatrick – a past beneficiary of Sheldon Adelson´s billions. The Bill is co-sponsored by fellow Pennsylvanian – Charles Dent – who earlier this year tried to get similar language included in a Federal spending bill.

The aim of the new Bill is to void the 2011 opinion of the Department of Justice that the Wire Act only applies to sports events. It also seeks to reinforce the interpretation of “unlawful Internet gambling” as defined in the Unlawful Internet Gaming Enforcement Act (UIGEA).

The Background to the Bill

In 1961, Congress passed the Wire Act – an Act intended to restrict the mafia´s gambling operations by making it illegal to bet on sporting events by “wire communication”. At the time the Act applied to telephone and telegram communications, but now could be interpreted to apply to Internet gambling.

In 2011, the states of Illinois and New York asked the Department of Justice whether or not the Wire Act applied to online lottery sales. The Department of Justice subsequently issued the “Memorandum Opinion” that the Act only applied to bookmaking or wagering pools related to sporting events.

The opinion opened the door for many other states to take their lotteries online. It was also the encouragement the states of Nevada, New Jersey and Delaware needed to regulate online poker. Anti-gambling figures (most notably Sheldon Adelson) have been fighting the opinion ever since.

Objectives Complicated by UIGEA

Although the Bill seeks to prohibit online gambling by restoring the original motives of the Wire Act, its objectives are complicated by UIGEA. Under Title 31 of the U.S. Code – specifically Subtitle IV, Chapter 53, Subchapter IV, §5362(a)(10) – “unlawful Internet gambling” is defined as:

To place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made.

However, exclusions to this section include where a wager is made and received within a single state, and where a wager is placed in accordance with state laws. This would mean that the states of New Jersey, Delaware and Nevada could continue to regulate online poker.

A further interpretation of the exclusions could imply that states subsequently passing legislation to regulate online poker would be exempt from the definition of “unlawful Internet gambling” – making the passage of HR 6453 meaningless other than to reinforce the Federal ban on sports betting and hinder attempts to regulate Daily Fantasy Sports (which has a carve-out under UIGEA anyway).

With the Objectives Complicated, What´s the Point?

The point of introducing the Bill seems to be nothing more than a thank you to Sheldon Adelson for the financial support he has given Fitzpatrick over the years. Fitzpatrick stood down from the last elections after being treated for cancer and is retiring at the end of the year. Consequently any accusations against Fitzpatrick for “cronyism” is not going to affect his political career.

Because the Bill doesn´t appear to affect states´ rights to regulate online gambling, it is unlikely to attract the wrath of Tenth amendment supporters. Nonetheless, it is not expected to travel any further than the committees to which it has been referred, in the same way as previous bills supporting a federal ban on Internet gambling have.

Jacqueline Packett
Jacqueline Packett