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Dan Ippolito

As Casino City's associate editor, Dan produces and edits all of our weekly newsletters, and he writes about the gaming industry for our websites and the GPWA Times Magazine. Dan graduated from Marist College in 2017 with a degree in Communications and a concentration in Sports.

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New US Department of Justice opinion says Wire Act applies to all online gambling

15 Jan 2019

By Dan Ippolito
Back in 2011, the U.S. Department of Justice’s Office of Legal Counsel issued an opinion that interpreted the Wire Act of 1961 as only pertaining to online sports betting. Yesterday, a new opinion from the DOJ declared that the Wire Act prohibits passing bets and wagers across state lines, as well as assisting in placing sports wagers — thus applying the Act to not only sports betting, but any form of gambling crossing state lines.

Since the U.S. Supreme Court determined the Professional and Amateur Sports Protection Act of 1992 (PASPA) to be unconstitutional back on 14 May, seven states have joined Nevada in implementing single-game sports betting, both online and land-based: New Jersey, Delaware, Pennsylvania, Rhode Island, West Virginia, Mississippi and New Mexico. These states may not be affected for sports betting and online sports betting, since it remains in the state.



However, states who have legalized online gambling since the 2011 decision may now have legitimate concerns if the new opinion is implemented into an enforcement action.

Christopher Soriano, a partner in the gaming group in the Cherry Hill, New Jersey, office of Duane Morris LLP, gave Casino City a breakdown on the matter.

“From a practical perspective, if a state has solely intrastate online gaming, this is unlikely to have a major effect because if the bets or wagers don’t cross state lines they don’t fall under the Wire Act,” Soriano said. “The issue comes up in interstate online lotteries or interstate sharing or online games, which requires further analysis at this point."

A major force behind the execution of this kind of potential restriction of online gaming in the U.S. has been spearheaded by casino magnate Sheldon Adelson, the Las Vegas Sands CEO who has spent millions of dollars toward the cause over the years.

Speaking on behalf of the Adelson-backed Coalition to Stop Internet Gambling, former senator Blanche Lincoln (D-Ark.) applauded the new DOJ decision, saying in a statement that the previous interpretation of the law was “as problematic legally as it was morally.”

“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 in 2006,” Lincoln added. “Today’s landmark action to rightfully restore the Wire Act is a win for parents, children and other vulnerable populations."

There are others who feel very differently than Lincoln.

“Though the full impact of this reckless DOJ reversal remains to be seen, we can be certain that it will inject uncertainty into a well-regulated market and push consumers back into the black market,” Nevada Congresswoman Dina Titus (D-NV-1) said in a statement issued this morning. “Unfortunately, the Trump Administration only supports states’ rights when it is politically convenient. Despite this setback, I will continue to lead the fight in Congress to ensure states like Nevada can decide what is best for them on the question of online gaming.”

It seems that whoever is first to receive a hint at being shut down will not let it happen quietly.

“We can expect that someone who is prosecuted or threatened with being shut down for violating the Wire Act will bring a challenge to seek a definitive interpretation. This will likely have to be solved in the courts over the next several years,” Soriano said.

It is still not completely clear who is at risk because of the “wording and placement of phrasing in the Wire Act,” according to Soriano. This will most likely have to be interpreted and determined before any further action can be completed.

As Soriano pointed out above, states that have legalized online lottery sales should also be concerned.

The 2011 opinion led several U.S. states to introduce intrastate online lottery, but more than seven years later, that may be changing.

 
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