US DOJ Aims to Reverse Online Gambling Laws, Again

US DOJ files appeal to include all internet gambling activities in Wire Act.

DOJ Files Appeal to include all Internet Gambling Activities in Wire ActTo the surprise of no one with any knowledge of the situation, the US Department of Justice (DOJ) is still donning their summer flip-flops. Following a sorted history that goes back more than a decade, the federal administration is hoping to see the definitions with in the Wire Act of 1961 altered to include all forms of online gambling.

At present – as it has for the last 8 years – the Wire Act makes it illegal to offer sports betting over any type of telecommunication service, including the internet. Such activities can only be offered, where legally regulated, at a licensed retail sportsbook. Since the reversal of the Professional and Amateur Sports Protection Act (PASPA) earlier this year, sports wagering is being legalized and regulated in more and more US states, which seems to be drawing the attention of political interests to reassess the subject of gambling – more pointedly, the ease of gambling – altogether.

DOJ Files Appeal to Include All Internet Gambling Activities in Wire Act

In November 2018, the DOJ made a head-scratching move to redefine the Wire Act. The department decided that its definition should include every form of online wagering, from online lotteries and sports betting, to casino games, poker, bingo, etc. If you can define it as gambling, the Wire Act should prevent its conduction via internet connectivity.

That became the DOJ’s stance, and it might have stuck, had it not been for the multitude of US states that offer various types of internet wagering options. The New Hampshire Lottery Commission was first to rise up to fight the DOJ, filing a lawsuit in February of this year. That federal court case officially postponed the DOJ’s decision until the case could be reviewed.

Then in In June, New Hampshire U.S. District Court Judge Paul Barbadoro issued a 60-page ruling. His decision – the Wire Act pertains only to sports betting.

“I hereby declare that § 1084(a) of the Wire Act… applies only to transmissions related to bets or wagers on a sporting event or contest,” concluding Judge Barbadoro in his ruling. “The 2018 OLC Opinion is set aside.”

DOJ’s Sorted History with the Wire Act and Online Gambling Laws

In order to understand why this story is so frustrating for more than 25% of all U.S. States, you need to understand the sorted relationship between the DOJ and the Wire Act. This piece of legislation was enacted in 1961 to prohibit certain forms of wagering; specifically the acceptance of sports bets over a telephone, since there was no internet at that time.

§ 1084(a) of the Wire Act reads:

…wire communication…for the transmission…of bets or wagers…of bets or wagers on any sporting event or contest…shall be fined…or imprisoned…or both”

In 2006, the US federal government passed the Unlawful Internet Gambling Enforcement Act (UIGEA), making it illegal to operate an online gambling business. However, that piece of legislation was based on the definition of the Wire Act of 1961.

In December of 2011, the DOJ determined that, by definition, the Wire Act only pertained to sports betting. Read that again… the DOJ said the Wire Act referred to sports betting only – no other forms of gambling.

It wasn’t until 2018 – a full 7 years later – that the federal justice department changed its mind, thereby attempting to rip the iGaming markets out from under 13 states who had since passed legislation and regulations for the lawfully conduction of online gambling. Those states, and their respective, authorized iGaming activities, include:

US States with Legal Internet Gambling

State Online Lottery Online Poker Online Casino
Georgia Yes No No
Delaware No Yes Yes
Illinois Yes No No
Kentucky Yes No No
Michigan Yes No No
New Hampshire Yes No No
New Jersey No Yes Yes
New York* Yes No No
North Carolina Yes No No
North Dakota Yes No No
Nevada No Yes No
Pennsylvania Yes Yes Yes
Virginia* Yes No No

*Online lottery sales legal via subscription only

A Long Road Ahead for DOJ’s Appeal(s)

Since the DOJ filed its appeal in the First Circuit Court, there’s undoubtedly a long road ahead before any finalization comes to pass. The courts are on leave for the summer and will not return until October, when it will surely take several more months for a full review of the appeal.

If the First Circuit Court of Appeals sides with Judge Barbadoro – which is the expected outcome among expert analysts – it won’t end there. It is projected that the DOJ will take its case all the way to the Supreme Court before this is over.

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