A new opinion issued by the US Department of Justice reverses a 2011 interpretation of the 1961 Wire Act. Seven years ago, the DOJ’s Office of Legal Counsel said that the Wire Act only applied to online sports betting. However, on Monday this week, a new opinion – dated November, 2018 – was published, showing a reversal of the 2011 opinion.
In the 2011 opinion, the reversal hinged on what was deemed to be an ambiguity of the Wire Act’s text and the assumption that all the clauses of the act were related to sports. However, the 2018 corrects that assumption, saying that the language is actually not ambiguous and the Wire Act covers all forms of online gambling.
The new DOJ opinion admits that the its reversal of its 2011 interpretation faces many challenges and that it will most likely find itself defending its position in courts of law. It also notes that some states based their launch of online lottery and online gambling operations on the 2011 opinion, and will fight to keep these products running.
It remains unclear how the published 2018 reversal will impact the three US states that launched online gambling and another six states that already have online lottery products up and running. While some say that intrastate gambling markets have nothing to fear, the new ruling could see some financial institutions refusing to process transactions for fear of breaking the law.
In addition, the shared liquidity online poker pact signed between Nevada, Delaware and New Jersey may also be in danger since they clearly cross state borders.
As online gambling operators mull their next move, Vegas Sands CEO, Sheldon Adelson and his Coalition to Stop Internet Gambling celebrated the news. In a gloating statement, they said: “Today’s decision seamlessly aligns with the Department’s longstanding position that federal law prohibits all forms of Internet gambling, as well as with Congress’s intent when it gave law enforcement additional tools to shut down the activity through the overwhelmingly-passed Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006.”
“Today’s landmark action to rightfully restore the Wire Act is a win for parents, children and other vulnerable populations.”
