The US Department of Justice is waiting until at least 2020 to enforce its reinterpretation of the Wire Act, according to a memo sent by the agency today.
That comes on the heels of a loss in federal court it suffered earlier this month. The DOJ, with an opinion crafted in 2018, had said the Wire Act applies to all forms of interstate gambling, and not just sports betting.
Here is part of the memo, directing anyone under the auspices of the DOJ to hold off any taking any action based on its new interpretation of the Wire Act:
On June 3, 2019, a federal district court in New Hampshire issued an opinion holding, inter alia, that Section 1084(a) applies exclusively to sports gambling. The Department is evaluating its options in response to this opinion. Accordingly, the forbearance period announced in the Deputy Attorney General’s February 28 memorandum is hereby extended from June 14, 2019 to December 31, 2019 or 60 days after entry of final judgment in the New Hampshire litigation, whichever is later.
The memo is initialed by Deputy Attorney General Jeffrey Rosen, who is new to the role since the initial Wire Act opinion came out.
You can see the full memo here:2019.06.12 Wire Act Memo
The DOJ was handed a pretty convincing loss in the US District Court for New Hampshire, with the judge saying that the DOJ is wrong in interpreting the Wire Act as it did.
A 2011 opinion from the DOJ, under the administration of President Barack Obama, had limited the scope of the Wire Act to sports betting taking place illegally across state lines.
The 2018 opinion from the DOJ and the administration of President Donald Trump reversed course, attempting to apply the federal law to all forms of gambling. That put in jeopardy all sorts of things, from online gambling to interstate lottery games.
That prompted the New Hampshire Lottery to bring the federal case.
Right now, the suit is awaiting a potential appeal by the DOJ to the First Circuit Court of Appeals. The memo stopped short of guaranteeing the appeal, saying only the DOJ is “evaluating its options.” But the long timeframe and the nod to the potential end of the case makes it seem likely the DOJ will look to do so.
The memo refers to the fact that the continued pushing back of potential enforcement is not a “safe harbor” from violations. Put another way; if the DOJ thinks lotteries, online casinos or even sportsbooks have run afoul of the Wire Act now or in the past, it could still prosecute violations.
From the memo:
Providing this extension of the forbearance period is an internal exercise of prosecutorial discretion and does not create a safe harbor for violations of the Wire Act. All other provisions of the January 15, February 28, and April 8, 2019 memoranda remain in effect.
It’s also not entirely clear how much of a win the federal case is beyond the plaintiffs in the case. It appears not to be a nationwide injunction against the DOJ.
In any event, we won’t see and Wire Act cases brought — at least for non-sports betting violations — before next year.