DoJ Reportedly Plans Reversal of 2011 Wire Act Decision

DoJ to Reconsider 2011 Wire Act Decision

Rumors have swirled that the Department of Justice (DOJ) may be looking into ways to reverse its decision from December 23, 2011, when challenged by the states of Illinois and New York, the DoJ ruled that the Wire Act only applied to sports betting.

If the opinion is substantiated by actual legal actions, the changes may sweep the online industry and poker ahead of the Christmas holiday, causing chaos.

The measure would come as a double whammy now that Senators Orrin Hatch and Chuck Schumer have dropped a bill suggesting the federal regulation of the sports betting industry.

The Implications for Online Poker and Casinos

Even if a DOJ U-turn in the treatment of the Wire Act occurs, it’s still difficult to say whether it would have an actual bearing on what happens next throughout the country, particularly in places where gambling activities are already fully-fledged or about to open up.

Many states are edging closer to introducing cross-state online gaming, including sports betting with Nevada and New Jersey already pooling their player bases. As to the legality of online gambling, the industry already enjoys a legal status in several states, including:

• Nevada
• New Jersey
• Delaware
• Pennsylvania (in 2019)

Dustin Gouker from Online Poker Report, Tweeted that while the story was quite significant in itself, he wasn’t entirely sure if it would change anything in terms of the legality of online gambling even if it dropped, at least in the short-term.

Mr. Gouker additionally pointed out that while he could confirm the existence of the DOJ’s new opinion, he couldn’t confirm if it would be introduced by the end of this week or at all.

Would like to stress even though this is a big/interesting story, as I sit here, I am not sure it functionally changes anything in the US, even if it is a full reversal and ends up being issued in the short-term. https://t.co/vfKlv2a8b3

— Dustin Gouker (@DustinGouker) December 19, 2018

Despite the slim chances of interstate poker losing any of its clout in places such as Nevada, New Jersey, and Delaware, the legislation could still prove disruptive. Understandably, much will depend on how the final opinion would be crafted.

The Black Friday events in 2011 led to the seizure of PokerStars’ US-facing domains along with those of other established card rooms, effectively winding down the industry for a good while before it was tentatively resuscitated in 2013.

Offshore Industries and Lotteries

When Illinois and New York approached DOJ back in 2011, both states were looking to expand their lotteries online and legalize the digitalization of tickets. The decision was only after used as the basis for legalizing trying to scale online poker as well.

Lotteries could as well be affected in the short-term, though, and how products are purchased from across states due to the existing networks between separate lotteries.

The measure can embolden offshore and unregulated websites which will continue to target US customers while the local industry takes legal blows.
But none of that has yet come to pass.