The Wire Act Battle Continues

Late last year, the US Department of Justice issued an opinion that the Wire Act of 1961 would be applicable to all forms of online gambling. For the people who don't already know, the Wire Act prohibits the use of wiring systems to fund gambling accounts. That means that while gamblers might be able to legally gamble online in their respective states of residence, they would not be able to fund their gambling account(s) via a credit/debit card, wire transfer or third party wires from a provider like Western Union.

It's noteworthy that in 2011, the same Department of Justice issued an opinion that stated the Wire Act was only applicable to sports gambling. That made a lot of sense given the fact there was no internet gambling in 1961. The law was clearly intended to keep gamblers from sending money to their bookies via a wire system. It was never intended to include the funding of lottery accounts, horse racing accounts or anything to do with online casino gambling.

For the gambling industry in America, the Department's change of position would make it very difficult for Americans to avail themselves of the opportunity to make bets online. The only deposit method they would have would be to make said deposits in person at a designed licensed facility.

Earlier this year, the New Hampshire Lottery Commission took exceptions to the Department of Justice's change of mind. Through the state's attorney general, they filed a suit in federal court, seeking to override the DOJ's new opinion. The New Hampshire suit was successful.

Not surprisingly, the DOJ has now filed and appeal with the First District Court of Appeals to have the lower court's decision set aside. The case in not likely to be heard until later this year as the higher court is currently in recess until October. At that time, all interested parties will engage in the battle.

On a certain level, the DOJ's position seems to be a bit mean-spirited. The fact is a majority of US citizens know how to gamble responsibly. The DOJ's position does not seek to stop online gambling, it only serves to inconvenience gamblers.

In a statement regarding targeting the wrong parties, Jeff Ifrah, founder of iDEA Growth said: “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 the right targets – the unlicensed illegal offshore Internet gambling operators who do not create jobs or tax revenue in the U.S. and do not appropriately protect consumers.”