For almost years, the U.S. federal government has only applied the Federal Wire Act to Internet sports gambling, not other forms of gambling, when it comes to allowing states to enter into interstate revenue sharing agreements. The Department of Justice (DOJ) then decided it wanted to create its own view of the Wire Act that did not fit the states. The Justice Department recently lost a court battle that ultimately led it to reconsider its position, and now that it has apparently given up the fight, gaming industry lawyers can see that there will be much more growth in online gaming soon.
DJ forced to withdraw by the position cord
Even as lotteries like Powerball gained new territory and online casinos started popping up, the DOJ didn't offer any resistance at first. Then suddenly, through its Office of the Legal Council (OLC), the Department of Justice decided to arbitrarily change its definition of the Wire Act, starting a war involving multiple states, attorneys general and the federal government. The Justice Department lost in court, and when it became obvious that there would be no appeal, the states gave a collective sigh of relief.
PokerFuse has contacted a number of lawyers working in the gaming industry to find out what the Justice Department Retreat means for online poker and casinos. In particular, how the lack of appeal demonstrates once again a departmental policy shift and how this could lead to more interstate online gaming deals as states are looking for new ways to increase revenue. Lynne Kaufman of Cooper Levenson told PokerFuse: "The exclusion of the failed prosecutor [the DOJ's decision not to appeal] certainly eliminates the risk of enforcement actions based on an 888 [OLC] opinion."
Another attorney, Jeremy Kleiman of Saiber LLC, added that "online casino gambling and online lotteries are now legal under federal law." He added: "By failing to appeal, the DOJ allowed [First Circuit] the Court of Appeal to have the final say. In fact, the court interpreted Congress' intent to pass the Wire Act and found that ultimately only sports betting was involved. So, under state law, it is legal to play online. "
Some lawyers encourage the precautionary approach
While many of the lawyers PokerFuse spoke to shared the same sentiment, some believe a more cautious approach is warranted. The Justice Department decided not to appeal the court ruling but did not make it clear that it intended to change its previous position. Longtime gaming law expert and attorney Jeff Ifrah of Ifrah Law explains that general attorneys "were hoping to get absolute comfort [from US Attorney General Merrick Garland]. “But the likelihood that the Department of Justice Biden or any future Department of Justice will want to extend the scope of the federal Wire Act again is very low, almost non-existent. States that want to pass laws on online games such as mobile poker and combine liquidity with other states offering legal mobile poker can and should do so immediately.
Even though the Department of Justice has yet to respond to requests for clarification on its current position, states are reportedly beginning to prepare for interstate gaming agreements or concluding existing agreements. There is already one poker deal, operated by 888poker, which covers Nevada, New Jersey and Delaware that could attract new states. The states created a multi-state online gaming agreement to facilitate new interstate deals, and now you can see other states like Michigan and Pennsylvania join as the Department of Justice removes an egg from your face.