DOJ Declines to Appeal Court Ruling Regarding Wire Act of 1961

In 2011, the Obama Department of Justice took the position that the Wire Act of 1961 was only applicable to sports gambling. The decision was made under the premise that the original law was directed towards illegal bookmakers who were collecting from sports bettors via wire transfers. Remember, there was no internet gambling back in 1961 because there was no internet.

Fast forward to 2018, the Trump Department of Justice under Attorney General Bill Barr decided to reverse course and try to imply that the Wire Act pertained to all forms of gambling, including online casinos, lotteries, and poker gambling. If the DOJ were able to enforce this position, it would have done major damage to an online gambling industry that had just been given the green light.

In reaction to the DOJ's new position, the New Hampshire Lottery decided to go against the DOJ's decision and took it to federal court. In June of 2019, the First Circuit U.S. Court of Appeals ruled against the DOJ's new position and gave them one year to file an appeal. It has now been a year, and the DOJ declined to appeal the federal court's decision.

This was a huge victory for the online gambling community. Had the First Circuit U.S. Court of Appeals ruled in favor of the DOJ, online gamblers (poker, casino, lottery) would have been left with virtually no way to fund their gambling accounts. Currently, almost all gambling activity done online is funded via wire transfers or credit cards, which get reclassified as wire transactions.

The biggest beneficiary of the DOJ's decision to not appeal might well have been the online poker industry. They benefit greatly by being able to link multiple states into joined poker events.

According to Jeff Ifrah, General Counsel for The iDevelopment and Economic Association group: “Now states considering legalizing online gaming can enter into compacts with other states that offer legal internet gaming, and state legislatures will have the ability to create rational gaming regulations that protect consumers, grow jobs, and generate tax revenues without risk of federal intervention.”

What About Online Sports Betting?

Technically, the Wire Act of 1961 disallows the use of wire systems to fund any kind of sports gambling. That would include online sports betting in America and abroad. Why then are U.S. online bookmakers able to accept credit cards and bank transactions?

For the most part, the provisions of the Wire Act are being universally ignored. That would only be an issue if the DOJ were to suddenly decide to go after sports bettors or bookmakers for using federal wiring systems.

Clearly, it's time for the Wire Act of 1961 to be removed by legislative action. With online sports betting picking up momentum throughout the country, the benefits to each state have become very apparent. So much so that the states would surely come together to combat any attempts to enforce this law.

While there may have been a time for this law, gambling looks very different in America in 2021.