On Tuesday, January 15th, the new Office of Legal Counsel (OLC) at the Department of Justice came up with a different interpretation of the widely disputable Wire Act. The new opinion states that the Wire Act applies to all forms of betting and not only sports betting, throwing the US online gambling market into doubt. The original legal document was enforced back in 1961 and has been causing some trouble in the online gambling industry since its initial establishment, mostly due to its wording.

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What Has Changed?

The latest opinion regarding this Act came back in 2011, during the presidential term of Barack Obama. Back then, it was determined that the law refers specifically to the interstate provisioning of online sports betting gambling activities.

Alternately, under the presidential rule of Donald Trump, the same Act has obtained yet another understanding. This opinion has been elaborated and signed by Assistant Attorney General Steven Engel at the Office of Legal Counsel.

Following weeks of whispering as to the Department of Justice’s (DOJ) willingness to once again ban online gambling on the federal level, the hammer has finally come down. In an opinion dated November 2 of 2018, which was only made public last week, the DOJ’s Office of Legal Counsel revised a previously issued interpretation of the Wire Act.
A new opinion issued by the US Department of Justice reverses a 2011 interpretation of the 1961 Wire Act. Seven years ago, the DOJ’s Office of Legal Counsel said that the Wire Act only applied to online sports betting. However, on Monday this week, a new opinion – dated November, 2018 – was published, showing a reversal of the 2011 opinion.

All of this comes at an interesting time since the new opinion is dated November 2nd, 2018. It’s considered fairly strange that someone would stall such a decision for two whole months.

What Does the Wire Act Opinion Say?

Likely though, the moment leading financial institutions knew to stay clear of online wagering was actually five years before a DOJ attorney decided it was OK for casinos to put slot machines on Americans’ mobile devices—when Congress enacted the Unlawful Internet Gambling Enforcement Act. In January, the US Department of Justice reversed a seven-year opinion that the 1961 Wire Act only applied to sports betting across state lines. But in its new opinion, the DOJ stated that the law could actually be more broadly applied to many or most forms of online gambling, especially if any part of the online gambling moves across state. The DOJ released their 2011 Opinion Memorandum and stated that the prohibition on state-based online gambling would be limited to sports gambling specifically. At the time PASPA was still in effect, effectively prohibiting sports betting in most of the United States.

Before analysts and experts delve deeper into the motifs and the background of this move, a more urgent matter refers to the actual consequences of such a change. The new opinion has reinterpreted the lack of a comma in the part regarding sports bets and wagers as implicitly referring to this gambling service. It now seeks to prohibit all interstate, wire-facilitated gambling services.

In the words of the opinion:

Only the second prohibition of the first clause of section 1084(a), which criminalizes transmitting ‘information assisting in the placing of bets or wagers on any sporting event or contest,’ is so limited. The other prohibitions apply to non-sports-related betting or wagering that satisfy the other elements of section 1084(a).

The 2006 enactment of the Unlawful Internet Gambling Enforcement Act did not alter the scope of section 1084(a).

While the Wire Act is not a model of artful drafting, we conclude that the words of the statute are sufficiently clear and that all but one of its prohibitions sweep beyond sports gambling. We further conclude that the 2006 enactment of UIGEA did not alter the scope of the Wire Act.

Note: You can find the complete Wire Act opinion here.

In any case, the Office of Legal Counsel isn’t the only involved party with an opinion on the matter. The most implicated parties in this restrictive stance are the online poker platforms sharing their player pool across state borders – Nevada, New Jersey, and Delaware. Partners are experiencing a plunge in revenue and stock value, with even greater repercussions expected to come in due time.

The Coalition to Stop Internet Gambling (CSIG) firmly supports this turn of events. Many opinionated individuals involved claim that CSIG is working to protect their leading figure, Sheldon Adelson’s land-based casino “kingdom”. The casino magnate has been a long time opponent of online gambling.

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Federal Courts Disagree

On the other hand, the Department of Justice has been facing some opposition just as well. Some courts and similar establishments have expressed their disagreement with the proposed opinion. They claim that the consequences would take effect over extremely wide service coverage while hindering everyone’s benefit.

How Will This Affect the Online Gambling Industry?

Slot machine jammer empire. There’s a lot of uncertainty around this turn of events. The new Wire Act opinion could potentially affect all forms of legalized online gambling. At a standstill and bewilderment, the DOJ has officially provided respective operators with a 90-day period to conform to the new regulations, explaining the delay as “an internal exercise of prosecutorial discretion”.

A new opinion issued by the US Department of Justice reverses a 2011 interpretation of the 1961 Wire Act. Seven years ago, the DOJ’s Office of Legal Counsel said that the Wire Act only applied to online sports betting. However, on Monday this week, a new opinion – dated November, 2018 – was published, showing a reversal of the 2011 opinion.

In the 2011 opinion, the reversal hinged on what was deemed to be an ambiguity of the Wire Act’s text and the assumption that all the clauses of the act were related to sports. However, the 2018 corrects that assumption, saying that the language is actually not ambiguous and the Wire Act covers all forms of online gambling.

Doj Online Gambling Opinion Report

The new DOJ opinion admits that the its reversal of its 2011 interpretation faces many challenges and that it will most likely find itself defending its position in courts of law. It also notes that some states based their launch of online lottery and online gambling operations on the 2011 opinion, and will fight to keep these products running.

Doj Online Gambling Opinion Survey

It remains unclear how the published 2018 reversal will impact the three US states that launched online gambling and another six states that already have online lottery products up and running. While some say that intrastate gambling markets have nothing to fear, the new ruling could see some financial institutions refusing to process transactions for fear of breaking the law.

In addition, the shared liquidity online poker pact signed between Nevada, Delaware and New Jersey may also be in danger since they clearly cross state borders.

Doj Online Gambling Opinion Check

As online gambling operators mull their next move, Vegas Sands CEO, Sheldon Adelson and his Coalition to Stop Internet Gambling celebrated the news. In a gloating statement, they said: “Today’s decision seamlessly aligns with the Department’s longstanding position that federal law prohibits all forms of Inte