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DOJ Losses Key Wire Act Decision

June 18, 2019

For the past four months, a number of states have had online gambling legislation held up by the Department of Justice's assertion that the 1961 Wire Act was applicable to all forms of online gambling. The Wire Act expressly banned the use of wire systems to cover gambling debts.

A key contention among the opponents of the DOJ's decision was that the original law was intended to keep gamblers from wiring money to their bookies to cover sports betting debts. This contention seems reasonable given that paying bookies would have been the only reason someone would have used wiring capabilities to cover anything related to gambling. There was no internet, hence, there was no need to fund a gambling account.

In recent years, several states (Rhode Island, New Hampshire, New Jersey, Delaware, Nevada and Pennsylvania) have passed legislation that permits its residents to gamble online. For a state like New Hampshire, legislation exists to allow residents to play the state lottery through online accounts that could be funded with wire transfers and debit/credit cards. When news came down that the DOJ had reversed it 2011 opinion that the Wire Act only applied to sports gambling, the New Hampshire Lottery Commission took exception to the new ruling, which would adversely affect lottery operations, and filed an appeal.

This past week, US District Court Judge Paul Barbadoro set aside the DOJ’s new opinion giving the New Hampshire Lottery Commission and the state's lottery players a big win. With the ball now in the DOJ's court, it's time for Attorney General William Barr to make what figures to be a very important decision for the online gambling community.

With the court's ruling, the DOJ can use it as cover to back off any attempts to stop states from allowing its residents to play the horses, lotteries and online casino games through accounts that could be funded with some form of wire facility.

It's important to note that the genesis of the DOJ's reversal back in January may have come under pressure from Las Vegas Sands Corporation CEO Sheldon Adelson. Adelson has long been an anti-online gambling warrior, seeking to protect his own interests in land-based casino operations in Las Vegas and Macau. 

The reality is the anti-online gambling sentiment is America is fading. Gamblers and state legislators alike want access to online gambling options. This new court ruling might be enough reason for the DOJ to back off and let the states do its jobs.

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