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Now it actually is official: The Wire Act case is over.
In January, the First Circuit Court of Appeals ruled in favor of the New Hampshire Lottery Commission in its suit against the US Department of Justice. The DOJ had until June 21 to appeal and has not done so, taking a potential Supreme Court battle off the table.
The Wire Act itself, dating back to 1961, remains intact. What was at issue was a 2018 reinterpretation of the law by the DOJ. In a nutshell the opinions – and the lawsuit – come down to how one parses certain language.
The Act uses the phrase “bets or wagers on any sporting event or contest” in one place, and simply “bets or wagers” elsewhere. The question is whether the latter is simply shorthand for the former, or if “on any sporting event or contest” was only meant to apply to the particular sentence in which it appears.
In 2011, the Illinois and New York lotteries asked the DOJ to clarify, and its official opinion was that “sporting event of contest” applied throughout. Seven years later, it reversed that decision, sparking the NHLC lawsuit.
In a media statement, Jeff Ifrah, General Counsel for iDEA Growth, called the result “a victory for states’ rights, for clarity in the reading of federal statutes, and for the gaming industry and its consumers.”
Although the DOJ has let this particular case come to an end, it could still attempt to impose new interpretations of the Act in ways that fall outside the scope of the suit. In the hopes of curtailing that possibility, a group of 26 Attorneys General have penned a letter to the DOJ, urging it to formally disavow its 2018 opinion and reinstate that of 2011.
Leading the charge are Michigan Attorney General Dana Nessel and Ohio Attorney General Dave Yost.
Their peer in New Jersey, Gurbir S. Grewal, signed the letter and his office also issued a statement of its own. NJ is the oldest and, for the time being, still the largest online gambling market in the US. Though the case was filed on behalf of interstate lotteries, its implications are strongest for the iGaming industry. Indeed, the impetus of the DOJ’s 2018 opinion was to use federal law to impede that industry’s growth.
“New Jersey’s legal gambling industry – and the many state services and programs supported by gaming revenue and tax dollars — would have been devastated in 2020 without online gaming. Internet gaming has for years been, and remains, an essential industry here, one the Department of Justice viewed since 2011 as perfectly legal until its baseless backtracking in 2018.”
Poker players have been paying close attention to the case. One of its major impacts would have been to render interstate poker illegal, even when both states have independently legalized online poker. That’s a big deal, especially for online poker in West Virginia, and potentially other small states which might want online poker but don’t have the population to support it on their own.
That’s far from the only aspect of iGaming that’s impacted, however. Even house-banked games can benefit from interstate connectivity. For instance, live dealer games are becoming popular in the US, but expansion to new states is slow because of the need to construct new studios.
Being able to stream live dealer games from one state to another would remedy that. Unfortunately, it would also be illegal under the 2018 interpretation. Interstate progressive slots jackpots would also be affected, although these don’t exist in the US as yet.
In all likelihood, this is the last we’ll hear of the Wire Act being applied to casino games and poker. Strictly speaking, however, the First Circuit decision is only binding when it comes to interstate lotteries in its jurisdiction. That covers:
In theory, the DOJ could try again elsewhere, or with a different product type, like online poker. Within the First Circuit, precedent would make it extremely hard for the DOJ to win such a case. Elsewhere, courts would take the First Circuit decision into consideration, but could choose to rule differently.
Nessel, Yost, Grewel, and the other 23 Attorneys General would like the DOJ to commit to not forcing the issue. The letter, addressed to US Attorney General Merrick Garland and his deputy Lisa Monaco, asks the DOJ to officially revert to its previous stance. Specifically, they want it to endorse the First Circuit ruling and then issue:
Part of the letter’s conclusion reads:
States have no interest in pursuing legal cases in every federal circuit to obtain a ruling like the one issued by the First Circuit, nor is litigation a good use of the Department’s resources. But States need finality on this issue before they invest more resources in the development of online lottery platforms. The Department can and should put an end to this matter once and for all.
It’s not clear whether the transition of power from the Trump administration to President Biden’s has changed the DOJ’s own stance on the issue. However, Biden himself has spoken briefly on the issue. His stance is that gambling is an issue for states to decide and that the DOJ should not meddle. That is likely one reason that the DOJ did not try a Supreme Court appeal. By the same token, it might make it more likely to accede to the AGs’ collective request.
Naturally, every state with an active iGaming market is represented among the signing Attorneys General. So too are those which are close to legalization, like Connecticut and Illinois.
A similar letter went out in 2019, shortly after the DOJ released its new opinion to the public. That one had the signatures of AGs from 25 states. Interestingly, the difference in the lineup doesn’t just come down to the addition of one new state. These states’ AGs were signatories to the first letter, but not the second:
It’s a matter of speculation why they’re sitting this one out. However, these are all states which voted for Trump in 2016, and either did the same in 2020 or went narrowly to Biden. Since the 2011 opinion happened under then-president Barrack Obama, it may simply come down to not wanting to be seen as siding with Obama and Biden over Trump, something bound to be unpopular with much of those states’ constituencies.
Here’s the full list of signatories of each letter. All told, AGs from 37 of 51 jurisdictions (including D.C. but excluding US territories) signed at least one of the two letters.
|State||Attorney General||2019 Letter||2021 Letter|
|Alaska||Kevin Clarkson (2019) / Treg Taylor (2021)||Yes||Yes|
|Indiana||Curtis Hill Jr.||Yes||No|
|New Jersey||Gurbir Grewal||No||Yes|
|New Mexico||Hector Balderas||Yes||Yes|
|North Carolina||Joshua Stein||Yes||No|
|North Dakota||Wayne Stenehjem||Yes||No|
|Rhode Island||Peter Neronha||No||Yes|
|South Dakota||Jason Ravnsborg||Yes||Yes|
|West Virginia||Patrick Morrisey||No||Yes|