Wire Act Fight is On Following DOJ Official Appeal Notice

August 19th, 2019 | by Greg Shaun

The US online gaming industry’s ongoing battle against the Wire Act will continue for the foreseeable future following a recent move by the Department of Justice (DOJ).

US online gaming is back in a state of uncertainty after the DOJ reignites the Wire Act debate. (Image: Promisec)

Having previously pledged to challenge a ruling in New Hampshire, the DOJ filed an appeal on August 16.

Coming just three days before the official deadline, the legal document states the federal agency’s intention to enforce its new interpretation of the Wire Act.

In submitting its appeal, the DOJ has put US online gaming operators on alert.

US Online Gaming Operators on Notice

Although an appeal was expected, it won’t immediately impact the industry. However, it is the start of a legal process that could ultimately affect the legality of online gaming in the US.

As per the document, the DOJ is challenging a June 3 decision by New Hampshire’s District Court.

Fueling the legal battle is the DOJ’s 2018 reinterpretation of the Wire Act. Under former Attorney General Loretta Lynch, the Wire Act was deemed to be applicable to sports betting only.

However, following continued pressure from Sheldon Adelson and his lobbyists, the DOJ’s interpretation changed in December. Citing ambiguity in the original text, the agency stated that the Wire Act applied to all forms of gambling.

States with an interest in online gaming quickly queued up to challenge the decision. First out of the gate was New Hampshire.

After hearing the appeal in June, Judge Barbadoro sided with the New Hampshire Lottery. In his opinion, the document as a whole, as well as historical precedence, show that the Wire Act is only applicable to sports betting.

Wire Act Saga Not Over Yet

The DOJ disagreed but was forced to extend its compliance deadline in light of a protracted legal case.

With the US online gaming industry given some breathing space, it’s been business as usual ever since. However, the status quo is by no means assured now the DOJ has restarted legal proceedings.

By filing its appeal notice, it will have to convince the Court of Appeals for the First Circuit to hear the case when it reconvenes in October.

From there, many expect the case to reach the Supreme Court before a final decision is made.

Although the situation is far from ideal, it’s unclear whether the DOJ’s new interpretation of the Wire Act will stand up to scrutiny. Once judge has already shot down the opinion and that makes others likely to follow suit.

Commenting on the case, iDEA Growth founder and legal expert Jeff Ifrah said the agency is focused on the wrong target.

“We hope that, rather than engaging in a protracted, expensive and ultimately unsuccessful legal fight, the Department will take this opportunity to negotiate a settlement which will focus the Wire Act and DOJ’s enforcement resources on unlicensed illegal offshore Internet gambling operators,” Ifrah said on August 16.

US online gaming has dealt with these types of threats before but things never get any easier. While recent history suggests the DOJ’s appeal will be unsuccessful, the jury is still out and that means uncertainty remains for now.