Federal Strikes Down 2018 Wire Act Opinion

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In perhaps the biggest win for online gambling since the 2011 DOJ Wire Act opinion, a federal judge has struck down the revised Wire Act opinion issued by the DOJ in late 2018. According to several reports, US District Court Judge Paul Barbadoro has issued an extensive ruling that reaffirms that the Federal Wire Act only applies for sports betting.

This is the best news possible for online gambling, and especially online poker as it now reopens the door for online poker expansion in the United States and ensures that the current interstate online poker network can continue to operate.

Federal Judge Rules Against DOJ

On Monday, US District Court Judge Paul Barbadoro issued a 60-page ruling on a lawsuit filed by the New Hampshire Lottery Commission and others against the DOJ over their 2018 opinion which effectively reversed the 2011 opinion regarding the Federal Wire Act.

This case largely revolved around state lotteries, and the DOJ was seeking to dismiss the case because they claimed that they had not decided whether they would prosecute state lotteries. Judge Barbadoro disagreed with this as the opinion had explicitly mentioned online state lotteries. He felt that the DOJ failed to prove that they would not prosecute lotteries.

Further, he stated that the plaintiffs had begun operating online lotteries (and other services) due to the directive of the DOJ and now the DOJ was reversing course and expecting everyone to follow the new directive immediately after a grace period. He felt that the risk of prosecution by the DOJ was substantial. He felt these “unusual circumstances” established standing for the plaintiffs.

Ultimately, Judge Barbadaro close his judgment with the following, “I hereby declare that § 1084(a) of the Wire Act, 18 U.S.C. § 1084(a), applies only to transmissions related to bets or wagers on a sporting event or contest. The 2018 OLC Opinion is set aside.”

What Does This Mean For the iGaming Industry

This is the best case scenario for the iGaming industry, at least for now, as it means that companies can go back to business as usual. The ruling could not have come at a better time for many companies, including the regulated online poker network. Time was running out on the grace period and even the WSOP had informed New Jersey players they may soon be prevented from playing in online bracelet events.

With the ruling, nothing will change regarding the operation of online poker or the interstate online poker network. If anything, this will help the industry as lawmakers and potential online casino operators can now seek to continue iGaming expansion throughout the United States.

Sports betting expansion has been steadily progressing but online poker regulation has slowed to a crawl outside of West Virginia. Few states have examined the issue and many felt that states would punt the issue down the road until this matter was resolved. For some states, it is too late to do anything for this year, but this makes 2020 an interesting year for iGaming expansion in the United States.

Will the DOJ Appeal?

The question now remains whether the DOJ will appeal this ruling to the United States Supreme Court. Many feel that the DOJ will move forward with such an appeal. Even Judge Barbadoro stated that he had a “strong feeling” that the DOJ would take the matter to the Supreme Court.

For those that are worried over such an appeal, it is not one that is likely to come about quickly. The Supreme Court looks at a limited number of cases each year and this case does not appear to have the high profile urgency of some cases. In other words, it could be years before this case goes before the Supreme Court, and there’s no guarantee that it will.