The Pennsylvania Gaming Control Board (PGCB) has issued a statement to online gambling licensees urging them to comply with the new Wire Act opinion released by the US Department of Justice (DOJ). This is causing great changes and turmoil in the online gambling industry, and could ultimately delay the launch of the state’s online gaming market, which was set to start in early 2019.
The latest Wire Act opinion restricts operators from performing all types of gambling activities outside of state borders. The decision is bound to affect multiple aspects of the gambling industry in Pennsylvania and other states, especially those belonging to the agreed shared poker pool.
Operators Have a 90-Day Window To Comply
Deputy Attorney General Rod Rosenstein
With so many issues arising from a simple reimplementation of an existing act, it seemed pertinent that some kind of adaptation period would be granted. The Deputy Attorney General Rod Rosenstein responded to the current situation through a memo pointing out to this necessity.
Rosenstein’s memo proposes a 90-day timeframe allowing operators to gain further understanding of the new interpretation of the law, and comply accordingly. Casino operators would have until April 15 to bring their systems into compliance.
PGCB Memo to Pennsylvania Casinos
Director Kevin O’Toole
The Pennsylvania Gaming Control Board has further indicated the need for compliance through their own set of recommendations. Kevin O’Toole, Director of the PGCB, sent a letter last week to all Pennsylvania casinos managers and their counsel to inform them of the key points in the new reading.
The letter emphasized the need that all gambling segments remain within state borders, and explains the new situation in his own words:
“While we fully recognize that this change may alter the plans of licensees in implementing expanded gaming offerings, it is a change not of the Board’s making but one commanded by the changing interpretation by federal law enforcement authorities. It is your obligation to comply with the federal law in all respects in establishing your gaming operations which must now be entirely ‘intrastate.’”Kevin O’Toole
In the Aftermath of the New Wire Act Opinion
With so many operators that applied for all kinds of online gambling licenses last year, Pennsylvania authorities have had to identify the ones most likely to be affected by the new interpretation of the law. Considering that legal online sports betting, poker, and casino activities are yet to be launched, the greatest focus has been directed at the recently launched retail land-based sportsbooks.
Impacts on Pennsylvania Online Gambling
For one, sports betting operators are facing lack of compliance due to the fact that services powering their data and financial transfers are off-shore. This severely undermines the legality of the whole banking methods used by the operators.
On the other hand, the opinion has additionally made void a law that legalized remote storage of gaming servers up until last week. And with the interstate banking operations – moving funds from one institution to another – also under investigation and possible prohibition, the operators are left in a less than admirable situation.
Ultimately, things aren’t looking too well for the Pennsylvania Lottery either. Local products don’t cause much trouble, but interstate Powerball and Mega Millions lotteries are bound to be affected by the new Wire Act opinion.
