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DOJ Decision Causing Turmoil for Online Gambling Interests

03/14/2019

The road ahead in new next few months is going to be difficult for the US online gambling industry. Back in January of this year, the US Department of Justice announced it was reversing a 2011 opinion about the 1961 Wire Act. In the 2011 opinion, DOJ officials stated they interpreted the Wire Act to only be applicable to sports gambling. In other words, players could use credit cards, Western Union type services or wire transfers to fund online gambling accounts except for sports betting. The 2011 opinion made clear the DOJ would only enforce the law as it pertains to sports betting

In January of this year, the DOJ stated it is adjusting its 2011 opinion to include the wiring of funds for any kind of online gambling activities. That includes online casinos, horse racing, lotteries and poker. The new ruling has absolutely shaken the US gambling industry, particularly online gambling interests, to the core. 

The new ruling, which was set to go into effect on April 15, 2019 has now been extended another 60 days to give all concerned parties more time to figure out how to proceed. It will also give online gambling interests enough time to pull together and file lawsuits against the DOJ. 

The precedent this reversing opinion would set is dangerous. For the better part of 8 years, horse racing, poker sites and online lotteries have been able to offer convenient ways for gamblers to fund their online gambling accounts. The notion online gamblers would have to fund their accounts by traveling to designated deposit locations/casinos to make in-person deposits would likely damage the infrastructure online gambling interests have already put into place. All of this turmoil would seem to be as an end-result of the actions of anti-online gambling groups led by people like Sheldon Adelson, CEO of the Las Vegas Sands Corporation. 

At this point, a lawsuit might not be good enough to get past the DOJ’s new directive. That would put the ball in Congress’ court to consider changing the language of the 1961 Wire Act. 

According to Assistant Attorney General for the Office of Legal Counsel Stephen Engel back in January of this year, “If Congress finds it appropriate to protect those interests [of operators], it retains ultimate authority over the scope of the statute and may amend the statute at any time, either to broaden or narrow its prohibitions." 

The gambling industry has a lot riding on this decision, making a hard fight through the court system certain.

 
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