US DoJ Does Another Flip Flop On Wire Act

Published: January 16, 2019

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Yesterday, the United States Department of Justice issued a new opinion on the Wire Act of 1961. It has now declared that passing bets and wagers across state lines, as well as assisting in placing sports wagers are prohibited. The opinion averred that the Act applies not only to sports betting, but any form of gambling crossing state lines. This completely overturns the 2011 opinion that interpreted the Wire Act as only pertaining to online sports betting.

Over the last six years there has been some progress in intrastate online gambling. This was given further impetus last year when the U.S. Supreme Court determined the Professional and Amateur Sports Protection Act of 1992 was unconstitutional. As of now, eight states have implemented single-game sports betting, both online and land-based. They are Nevada, New Jersey, Delaware, Pennsylvania, Rhode Island, West Virginia, Mississippi and New Mexico.

American states that have legalized online gambling since the 2011 Department of Justice opinion may face legal issues if the new opinion is implemented into an enforcement action. Experts opine that if a state has solely intrastate online gaming, then it is unlikely to be effected. The Wire Act comes into play only if the bets cross state lines. However, the moves to share liquidity among states that have legalised online gambling regimes may be in trouble. The issue also comes up in interstate online lotteries.

It has been reported that the man behind the reversal of the Department of Justice opinion is casino magnate Sheldon Adelson. The CEO of the Las Vegas Sands has spent millions of dollars toward the cause over the years. Speaking on behalf of the Coalition to Stop Internet Gambling, former Democrat senator Blanche Lincoln applauded the new decision, claiming that the 2011 decision was flawed legally and morally. He claimed that the present interpretation is also consistent with the Unlawful Internet Gambling Enforcement Act passed in 2006.

There are others who feel very differently. Nevada Congresswoman Dina Titus said that the reckless DOJ reversal will once again create uncertainty into a well-regulated market and push players back to offshore online gambling sites. The courts can expect a flurry of law suits seeking injunction against any action against online gambling and a definitive interpretation of the Wire Act. But any forward action being planned by the other states is likely to be put on hold. Hopefully this will not end up being one step forward and two steps back for the American online gambling industry.


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