In Positive Development for Gaming Industry, DOJ Declines to Pursue Previous Administration’s Push to Expand Reach of Wire Act Beyond Sports Betting
WASHINGTON, DC – June 22, 2021 – The gaming industry breathed a sigh of relief today as the U.S. Department of Justice (DOJ) allowed a deadline to pass to seek Supreme Court review of an appeals court decision surrounding the 2018 interpretation of the federal Wire Act and its applicability to gaming other than sports betting. This lack of action settles the question of whether gaming such as regulated online lottery ticket sales, poker, or casino games falls under state or federal law.
In 2011, the DOJ’s Office of Legislative Counsel (OLC) undertook a review of the Wire Act and concluded that its prohibitions applied only to online sports betting. After the 2011 ruling, several states enacted legislation and built infrastructure to license internet poker and casino gaming operators within their borders and/or sell lottery tickets online, in reliance on the OLC opinion. However, in 2018, the Trump Administration DOJ had the OLC revisit the 2011 guidance, resulting in a new opinion that extended the Wire Act to all forms of internet gambling, creating confusion throughout the industry.
Shortly after the 2018 opinion was made public, the New Hampshire Lottery and its partner NeoPollard filed suit against the DOJ in the District of New Hampshire. iDEA Growth joined the suit in an amicus capacity on behalf of the online gaming industry. In iDEA Growth’s briefs filed in the case, it argued that both states and industry actors had acted in reliance on the 2011 interpretation of the Wire Act in developing their online gaming offerings; these offerings included multi-state compacts that allowed online poker operators to allow players in multiple states where online poker was legal to play in games with one another.
On June 3, 2019, the U.S. District Court for the District of New Hampshire issued a ruling in New Hampshire Lottery et a. v. Barr finding that the Wire Act applied only to sports betting, effectively restoring the 2011 OLC opinion’s analysis. And on January 20 of this year, the U.S. Court of Appeals for the First Circuit issued a ruling upholding the New Hampshire court’s decision.
Jeff Ifrah, General Counsel for iDEA Growth (iDevelopment and Economic Association), a 501(c)(6) association which seeks to grow jobs and expand the online interactive gaming business in the United States through advocacy and education, calls the move “a victory for states’ rights, for clarity in the reading of federal statutes, and for the gaming industry and its consumers.”
Ifrah says that by allowing the deadline to pass, DOJ is standing by its original 2011 opinion that the Act applies only to sports betting, thus clarifying the confusion caused by a contradictory opinion issued by the OLC under the Trump Administration in 2018. He continues, “The DOJ’s decision to not seek Supreme Court review—as well as all the court decisions thus far nullifying the 2018 opinion—signifies that confusion around the interpretation of the Wire Act may be a thing of the past. 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.”
iDEA Growth (iDevelopment and Economic Association) is a 501(c)(6) association which seeks to grow jobs and expand the online interactive gaming business in the United States through advocacy and education. We represent all sectors involved in the growing industry of internet gaming and entertainment, including operations, development, technology, marketing, payment processing, and law.