Online gambling is growing more popular throughout the United States. Several states, including New Jersey, Pennsylvania, and Delaware have legalized internet casino gambling. Many now allow online sports betting, as well. This week, the Department of Justice officially filed an appeal to the Department of Justice’s recent Wire Act ruling.
It’s disappointing, yet not entirely surprising news. The DOJ had until August 19th to file this appeal. It’s clear that they’re ready to continue pushing the opinion that they made back in November. Let’s look at exactly what’s happening here.
DOJ Files New Opinion on the Wire Act
The Interstate Wire Act of 1961, also known as the Federal Wire Act, is a US federal law that prohibits placing wagers using interstate transmissions or wire communications that cross state lines. Initially, this law was set in place to crack down on organized crime. Back in the 50s and 60s, crime groups would use gambling as a way to launder their money.
The Wire Act was eventually changed to apply to online gambling, as well. For years, internet gambling that crossed state lines was prohibited. In 2011, under the Obama administration, the DOJ ruled that the Wire Act applied only to sports betting.
As a result, several states began offering forms of online gambling. New Hampshire currently allows Mega Millions lottery tickets to be purchased online. This lottery is a multi-state lottery, meaning it would have been illegal before the DOJ’s 2011 Wire Act opinion.
In November of 2018, things took a turn for the worst. The DOJ reversed it’s Wire Act ruling, claiming that all forms of online gambling are illegal. States with legal internet gambling options quickly fought back in the courts. The DOJ isn’t giving up, though.
District Court States that 2011 Wire Act Ruling is Correct
New Hampshire was one of the first states to fight against the DOJ’s most recent opinion on the Wire Act. This state claims that it would force their online lottery operations to shut down. This would cost the state millions of dollars in revenue each year.
On June 3rd of this year, US District Court Judge of New Hampshire Judge Paul Barbadoro stated that the Wire Act only applies to sports betting. Other forms of gambling, including online lottery sales and internet poker, are perfectly legal.
With the court’s decision, the 2018 DOJ opinion was essentially shut down. States could still offer forms of online gambling that crossed state lines. Barbadoro gave the Department of Justice until August 19th to file an official appeal to the new Wire Act ruling.
That appeal is now being made. Today, the DOJ has officially filed an appeal against New Hampshire. The courts will now be forced to hear the DOJ’s side of the story and make another ruling on the matter. One of the country’s top online gambling trade groups is quickly voicing its disapproval.
iDEA Growth Comments on DOJ’s Decision to Appeal
It’s clear that both states and online gambling companies are displeased with the DOJ’s decision to continue fighting this issue. Internet gambling is proving to be extremely lucrative for many states, including New Jersey, which is experiencing unprecedented rises in its gambling revenue. Today, the top online gambling trade group in the US, iDEA Growth, began calling on the DOJ to drop its appeal.
This group claims the appeal is part of a political move. Jeff Ifrah, founder of iDEA Growth, released an official statement on the matter.
“The Department’s action, while hardly unexpected, is certainly unwarranted,” he said. “DOJ generally files appeals of adverse district court decisions as a matter of course. We hope that, rather than engaging in a protracted, expensive and ultimately unsuccessful legal fight, the Department will take this opportunity to negotiate a settlement which will focus the Wire Act and DOJ’s enforcement resources on the right targets – the unlicensed illegal offshore Internet gambling operators who do not create jobs or tax revenue in the U.S. and do not appropriately protect consumers.”
Ifrah certainly has a point. It’s unlikely that the DOJ appeal will be successful. The New Hampshire court’s Wire Act ruling was made with careful consideration. Instead of continuing a legal battle, Ifrah argues, the DOJ should focus on working to better regulate the US casino websites that are based in other countries.
It’s an interesting time for the US online gambling industry. Make sure to stay tuned for more updates on the situation over the next few weeks!