DOJ takes new stance on Wire Act and US online gambling
The US Department of Justice has reversed its 2011 opinion on the Wire Act of 1964 and is now saying that the Act applies to all online gambling, not just sports betting. This is a major development in US gaming law and could have a massive impact on the budding US market.
What’s at issue here is whether or not the Wire Act’s language actually authorizes the creation of interstate online gambling. In it’s initial re-interpretation of the Act in 2011, the DOJ basically said that the Act only applied to sports betting. Under the new interpretation, the DOJ is suggesting that the Act applies to all activities that cross state lines.
So what does this mean for the US online gambling business? For starters, it means that that most existing forms of online gambling are still safe. What could be in jeopardy are interstate gambling compacts, the kind that make for a robust online poker market. The new interpretation also endangers most forms of daily fantasy sports.
The new interpretation was posted in November, but wasn’t noticed until reporters at Online Poker Report noticed it recently on a DOJ website.
What seems more interesting is why the DOJ would reverse its own decision, absent of any public outcry on online gambling? The answer to that question seems to be good old-fashioned patronage. Casino magnate Sheldon Adelson is both a long-time proponent of banning online gambling (he doesn’t like the competition) and a Trump supporter. Adelson recently poured tens of millions of dollars into GOP campaigns during the recent midterm elections and this decision is pretty clearly a thank you note for his efforts.
Of course no one thinks this story will end without a massive legal fight and that’s what we’re likely to see next. That said, it should be interesting to hear DOJ attorneys explain exactly why they’re pulling a 180 on an issue that hasn’t exactly ignited the American public. Stay tuned for what is certain to be a major piece of gaming news in 2019.