The US Department of Justice was granted an extension last week by the United States Court of Appeals for the First Circuit that effectively delays the case to determine if the Wire Act of 1961 applies to online gaming beyond sports betting.
Following the announcement by the DOJ in January 2019 that it has a new interpretation of the Wire Act which it now believes restricts all forms of online gambling and not just sports betting (as it had been interpreted by the previous administration), the New Hampshire Lottery Commission (NHLC) filed suit.
Ultimately, District Court Judge Paul Barbadoro sided with the NHLC in June and ruled that the Wire Act “applies only to transmissions related to bets or wagers on a sporting event or contest,” setting aside the reinterpretation of the Wire Act.
Just days later, the DOJ issued a memorandum directing federal law enforcement agencies to refrain from applying the Department’s revised opinion on the Wire Act until at least the end of the year. Then in August, the DOJ officially filed an appeal in the case.
As part of the appeal process, the DOJ was supposed to file an appellant’s brief explaining why it believes the trial court should not have ruled against it by November 12, but as a result of the extension, the deadline has now been moved to December 20, 2019 which means it will be well into 2020 before a decision is rendered by the First Circuit Court of Appeals.
Industry pundits fully expect this case to go all the way to the Supreme Court if necessary, but they have also pointed to the calendar as a potential obstacle in the current administration’s bid to reinterpret the Wire Act.
During a panel discussion at the 2019 Global Gaming Expo, it was pointed out that an administration change in the 2020 election could result in the DOJ dropping its bid to reinterpret the Wire Act.
What Does the Extension Request Say About the DOJ’s Case?
So, with time being of the essence for the DOJ in this case, why is it dragging its feet, and what if anything does it signal to?
When asked if the request for an extension makes it more or less likely that the DOJ will continue to pursue its reinterpretation of the Wire Act, Jeff Ifrah, prominent online gaming attorney and founder of iDEA (iDevelopment and Economic Association) an advocacy group for the online interactive gaming industry, told pokerfuse:
“The DOJ’s request for an extension for filing their appeal brief could mean one of two things: either they really needed an extension of time, or that they are not yet willing to commit to a position in writing containing their arguments with respect to the scope of the Wire Act.”
“It could, of course, be a little of both,” Ifrah continued. “But we should keep in mind that the New Hampshire federal court issued its decision on June 3, which would have given the DOJ over five months to file an appeal brief before the original deadline. That is usually plenty of time. So, while it is impossible to know the reason the DOJ requested an extension, there is reason to remain optimistic that they are considering no longer pursuing its reinterpretation of the Wire Act. We will find out soon!”
Pennsylvania Online Poker Hindered by New Wire Act Opinion
Soon after the DOJ released its revised opinion on the Wire Act, the Pennsylvania Gaming Control Board (PGCB) advised online gaming operators preparing to launch that they need to comply with the new DOJ policy.
Interactive gaming regulations in Pennsylvania originally allowed operators to host infrastructure in other states, a practice that would be illegal under the new DOJ policy. To allow operators to adapt to the change in policy, the PGCB extend its deadline for operators to submit their online gaming plans.
Despite the threat posed by the new DOJ opinion of the Wire Act, the All American Poker Network (AAPN), comprised of online poker rooms operated under the WSOP.com and 888poker brands, continues to allow its players in New Jersey, Nevada and Delaware to compete at the same poker cash game and tournament tables.
However, the PGCB has taken a more cautious approach, not allowing Pennsylvania online poker operators to combine their player pools with those in other states. And so far, the PGCB has given no indication that it will consider shared liquidity before the Wire Act situation is settled once and for all.
