Breaking: DOJ Declines Appeal of Wire Act Case; Several States Expected to Sign Interstate Online Poker Deals

With no appearance of an appeal filed on the official docket of New Hampshire Lottery Commission v. Barr (the Wire Act case), the allotted time to seek further appeal by the US Supreme Court has expired, and the case has finally come to an end.

With the Biden Justice Department’s decision not to pursue an appeal of a Wire Act case the government lost in appellate court in January, several states are expected to sign deals that would allow online poker operators to form interstate player pools by year’s end.

Regulators in Michigan and Pennsylvania are expected to pursue this opportunity soon. It also opens up the possibility of online poker in West Virginia, could attract more operators seeking approval in Nevada, and makes smaller states like Connecticut much more feasible.

According to prominent igaming attorney Jeff Ifrah, the time allotted to appeal the case to the US Supreme Court was extended to 150 days due to the pandemic, setting up the June 21 deadline.

The Justice Department today issued a statement that “the government is not planning to seek Supreme Court review of the First Circuit’s decision,” Ifrah stated on Twitter.

In 2019, a federal district court judge ruled against the then-Trump era DOJ and agreed with the Obama-era DOJ and the lottery commission that the federal Wire Act applies only to online sports betting, not online poker or other forms of igaming.

The Trump DOJ appealed to the First Circuit Court of Appeals but lost again on the day of Biden’s inauguration.

A Path to Growth for US Online Poker

The government’s decision not to appeal provides long-awaited regulatory clarity for the online gaming industry, since states that have legal regulated online poker also require that any shared liquidity agreement with other states not run afoul of federal law. Regulators in Pennsylvania didn’t consider the case settled even after the favorable appellate court ruling on Jan. 20.

The regulatory clarity from the conclusion of the Wire Act case is expected to lead to an increase in interstate online poker and a boom the US online poker industry overall.

Combining player pools leads to more players playing at the same cash game tables and in the same tournaments, which means more cash games will run and due to the increased number of players, tournaments will have larger prize pools.

More frequent cash games and bigger tournament prizes will attract more players to legal regulated online poker sites in the US and away from their illegal offshore competition.

Plus, with more interest in online poker, competition should heat up between the regulated rooms which could mean increased marketing and better promotions for players.

Interstate Online Poker Expected to Expand

Shared liquidity currently exists in the US thanks to the Multi-State Internet Gaming Agreement (MSIGA), which comprises Delaware, Nevada and New Jersey. Currently, the 888poker network, which is the home to WSOP NJ, WSOP NV, 888poker NJ and three racino skins in Delaware, is the only interstate online poker network in operation in the US.

Pennsylvania and Michigan joining MSIGA would increase the number of interstate online poker networks in the US to three almost immediately with the addition of the partypoker US Network and a PokerStars USA Network. Such impetus could also spark interest in other operators offering online poker to this new larger player pool.

Last month, Yaniv Sherman, 888 Holdings’ Senior Vice President and Head of US, told Poker Industry PRO that its partner WSOP plans to launch in Pennsylvania and Michigan this summer — more than likely in June and July, pending certification of their systems by the third-party labs working with state gaming regulators.

Sherman said Pennsylvania will probably launch first, with Michigan not too far behind. He also indicated that regulators in both states would likely consider share liquidity a settled matter if the Biden DOJ did not appeal. Neither expansion is dependent on shared liquidity being in place, he said.

Meanwhile, PokerStars USA is in a dominant position for shared liquidity in part because it controls the online poker markets in Michigan and Pennsylvania; it also operates in New Jersey. While not technically a network, it could eventually form the largest one in the nation. PokerStars is not currently allowed to operate in Nevada, so it is unable to share its player pool in New Jersey.

BetMGM is also expected to launch an interstate online poker network as it currently has a ringfenced network in New Jersey, Pennsylvania and Michigan. Last month, Entain, a joint owner of BetMGM, received a three-year interactive gaming license extension in Nevada. The extension was granted after a provisional license, awarded when the company was known as GVC Holdings, was about to expire.

While BetMGM hasn’t revealed its plans to go live with online poker in Nevada, preparations the company made for the license extension indicate that a Nevada launch seems probable.