Wire Act Changes Require 90 Day Compliance

Summary: After a change to the Wire Act by the Department of Justice was made public this week, a memo has been released giving businesses 90 days to make changes.

Sports BettingThis week, it was made known that the Department of Justice has decided to rule that the federal Wire Act applies to all forms of interstate gaming. In the past, the Act applied to only sports betting. With the change, online poker and lottery gaming will be affected and possibly the online casino industry as well. Now, a memo has been issued by the US Deputy Attorney General Rod Rosenstein that states the new opinion will take effect in 90 days. In this time frame, the office will be making guidelines.

90-Day Time Frame

During the 90-day time frame in which the federal government will be making prosecutorial guidelines, there will be no safe harbor so to speak for those who are in violation of the law based on the new opinion. All types of legalized online gambling may be affected with this new change, as any online gambling is considered illegal if it takes place across state lines.

In several states, online casino gaming, lottery, sports betting, poker and daily fantasy sports takes place. Sometimes, the transactional data involved will travel across states lines. Yet the actual gaming will take place within a single state. However, there are some instances where gaming does take place across state lines and payment systems as well. Due to the new interpretation, even the payment methods may be an issue which could leave some online gambling operators in hot water.

In the memo, Rosenstein has designated the Organized Crime and Gang Section of the Criminal Division to review the Wire Act and approve any proposed charges. The Justice Manual will soon include the findings of the review and approval process for prosecutions to be made based on the Wire Act interpretation. Further guidance can be provided for department attorney’s who have any questions regarding the implementation of the Wire Act.

Confusion Remains

Since the new opinion has been provided, there has been much confusion as to what will happen. It is believed that action will be taken to take the matter to court. Experts feel that the issue will be in litigation within the 90 day time frame set for the guidelines to be created. States may decide to sue the federal government in the hopes of obtaining a judgement that the Wire Act still only applies to sports betting.

As of the release of the Wire Act change, there has yet to be any change in a state offering online lottery ticket sales or online gaming. It seems that states are pushing ahead with any new changes, such as Rhode Island, one of the latest states to put forth legislation that will legalize applications for sports betting within their borders.

In reality, there was great clarity as to what was allowed for online gambling with the Wire Act from the changes made in 2011. This new opinion simply creates more obscurity and a sense of unknowing that only causes confusion instead of actually helping.

For now, it seems that operators are going to continue as normal. As the guidelines are created by the federal government, we will have a clearer picture as to what is expected of operators. Hopefully, the online gambling industries will not be affected in such a way that will cause strain or the ceasing of operations.