DOJ Opinion Says Wire Act Applies To All Online Gambling

DOJ Reverses Wire Act OpinionOn Tuesday, January 15th, the new Office of Legal Counsel (OLC) at the Department of Justice came up with a different interpretation of the widely disputable Wire Act. The new opinion states that the Wire Act applies to all forms of betting and not only sports betting, throwing the US online gambling market into doubt. The original legal document was enforced back in 1961 and has been causing some trouble in the online gambling industry since its initial establishment, mostly due to its wording.

What Has Changed?

Assistant Attorney General Steven Engel

Assistant Attorney General Steven Engel

The latest opinion regarding this Act came back in 2011, during the presidential term of Barack Obama. Back then, it was determined that the law refers specifically to the interstate provisioning of online sports betting gambling activities.

Alternately, under the presidential rule of Donald Trump, the same Act has obtained yet another understanding. This opinion has been elaborated and signed by Assistant Attorney General Steven Engel at the Office of Legal Counsel.

All of this comes at an interesting time since the new opinion is dated November 2nd, 2018. It’s considered fairly strange that someone would stall such a decision for two whole months.

What Does the Wire Act Opinion Say?

Before analysts and experts delve deeper into the motifs and the background of this move, a more urgent matter refers to the actual consequences of such a change. The new opinion has reinterpreted the lack of a comma in the part regarding sports bets and wagers as implicitly referring to this gambling service. It now seeks to prohibit all interstate, wire-facilitated gambling services.

In the words of the opinion:

Only the second prohibition of the first clause of section 1084(a), which criminalizes transmitting ‘information assisting in the placing of bets or wagers on any sporting event or contest,’ is so limited. The other prohibitions apply to non-sports-related betting or wagering that satisfy the other elements of section 1084(a).

The 2006 enactment of the Unlawful Internet Gambling Enforcement Act did not alter the scope of section 1084(a).

While the Wire Act is not a model of artful drafting, we conclude that the words of the statute are sufficiently clear and that all but one of its prohibitions sweep beyond sports gambling. We further conclude that the 2006 enactment of UIGEA did not alter the scope of the Wire Act.

Note: You can find the complete Wire Act opinion here.

Divided Views on the New Opinion

In any case, the Office of Legal Counsel isn’t the only involved party with an opinion on the matter. The most implicated parties in this restrictive stance are the online poker platforms sharing their player pool across state borders – Nevada, New Jersey, and Delaware. Partners are experiencing a plunge in revenue and stock value, with even greater repercussions expected to come in due time.

Anti-Gambling Group Supports the Decision

The Coalition to Stop Internet Gambling (CSIG) firmly supports this turn of events. Many opinionated individuals involved claim that CSIG is working to protect their leading figure, Sheldon Adelson’s land-based casino “kingdom”.  The casino magnate has been a long time opponent of online gambling.

Federal Courts Disagree

On the other hand, the Department of Justice has been facing some opposition just as well. Some courts and similar establishments have expressed their disagreement with the proposed opinion. They claim that the consequences would take effect over extremely wide service coverage while hindering everyone’s benefit.

How Will This Affect the Online Gambling Industry?

There’s a lot of uncertainty around this turn of events. The new Wire Act opinion could potentially affect all forms of legalized online gambling. At a standstill and bewilderment, the DOJ has officially provided respective operators with a 90-day period to conform to the new regulations, explaining the delay as “an internal exercise of prosecutorial discretion”.

Shelly Schiff

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