On Monday, January 14, the United States Department of Justice’s Office of Legal Counsel issued a new legal opinion on the Wire Act of 1961. This new opinion stated that the Wire Act applied not only to sports betting but also all other forms of interstate online gambling – this effectively reversed a 2011 Office of Legal Counsel opinion which gave several states the green light to launch online lottery, online casino, and online poker products for customers within their respective borders. Sports betting, both online and land-based, has also cropped up in numerous states in the recent past following the May 2018 Supreme Court ruling that lifted a federal ban on sports betting.
The new Wire Act opinion has cast a grey cloud over federal online gaming laws as there is a lot of confusion regarding what it implies in practical terms. The only thing that most people can agree on right now is the fact that the online poker liquidity-sharing pact between gaming operators in New Jersey, Delaware and Nevada will be hit the hardest. A day after announcing the new opinion, the Department of Justice issued a press release in which it set a 90-day delay period within which “federal prosecutors should not apply the Wire Act to non-sports-related betting or wagering.”
Despite the delay, a number of stakeholders in the gaming industry are still not happy about the decision and the impacts it is expected to have on both lotteries and internet gambling. It goes without saying that further guidelines from the Justice Department will be required before the full impact of the opinion is known – this is because the state will only be able to adjust appropriately once they know how the decision will be enforced.
Necessary Adjustments
The Pennsylvania Gaming Control Board has already acknowledged the fact its licensees will have to make adjustments to ensure that they comply with the new Wire Act opinion. The immediate effects will be felt by some of the early adopters of Pennsylvania online betting – the Wire Act opinion dictates that all wagering must be conducted entirely within the state’s borders but these operators have the data and financial transactions powering their sportsbooks located elsewhere.
A statement released by the gaming regulator has warned all of the licensed operators that the regulation that allowed gaming servers to be located off-state no longer applies.
“As a result of the Opinion and at this time, we no longer believe it is consistent with law as articulated in the Opinion to locate the interactive gaming devices and associated equipment in any jurisdiction other than Pennsylvania,” reads an excerpt from the statement.
Fortunately, the impacts of the new opinion are unlikely to have an effect on sports betting in the Keystone State as well as all other states with sports betting. This is because the Wire Act already included sports betting and therefore the states crafted laws that were in line with it.
