No enforcement until June; no safe harbor

Wire Act Enforcement Postponed Until June; Here’s What You Need To Know

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As first reported by Online Poker Report last week, the Department of Justice has officially extended its non-prosecution period for its revised Wire Act opinion.

The original window was set to expire on April 15, but a new memo signed by Deputy Attorney General Rod Rosenstein and obtained by CDC Gaming Reports pushes that deadline back into summer.

“We have decided to extend that window an additional 60 days (through June 14, 2019),” Rosenstein wrote. “Providing this extension of time is an internal exercise of prosecutorial discretion and does not create a safe harbor for violations of the Wire Act.”

Of course, what exactly compliance means is still an open question.

What happens next

So far, it’s mostly business as usual in states with legal online gambling. That’s unlikely to change until the DOJ crystallizes its new position on the Wire Act.

The extension could be a positive development or a negative one — or both.

The good

The extension could signal efforts from the DOJ to walk back or limit the overall scope of the controversial opinion.

The case to which analyst Chris Grove is referring is the suit from the New Hampshire Lottery Commission, which is now being fast-tracked.

Further, new US Attorney General William Barr has been outspoken about federal overreach, and the new Wire Act opinion is a textbook case of the federal government trampling states’ rights. As such, Rosenstein may be leaving the particulars of enforcement to Barr.

The bad

The ambiguous decision — and an even more ambiguous enforcement memo — are already having an effect on the US online gambling industry.

The revised Wire Act opinion spooked the Pennsylvania Gaming Control Board enough that it informed licensees that all gaming servers must be located in the state. The board initially allowed servers to be located in other jurisdictions with legal online gambling.

And then there’s the World Series of Poker.

The WSOP has yet to decide if, as it did in 2018, it will let New Jersey customers participate in online bracelet events. The state began sharing online poker liquidity with Nevada (and Delaware) in 2018, which gave WSOP NJ players access to online bracelet events.

The revised Wire Act interpretation has put such interstate online poker in jeopardy.

Unless the NH case provides some clarity, postponement simply extends the uncertainty into June. So, rather than having a clear picture of what it can and can’t do in April, the WSOP may have to wait until June before it can decide on the eligibility of New Jersey customers.

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It could still get ugly

The opinion is on shaky legal footing, and its origins really test its legitimacy. That said, it does exist, and a court challenge isn’t going to be a slam dunk, no matter how controversial it might be.

At the end of the day, unless the DOJ loses badly in court — or walks back the opinion of its own volition — this is a fight that will weave its way through the courts over a period of years. And until a final decision is rendered, uncertainty reigns supreme.

- Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus for OPR is the developing legal and legislative picture for regulated US online poker and gambling.
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