January 20, 2021 Casino, Legal, Online

Appeals Court rejects Trump-era DOJ Wire Act memo

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A federal appeals court has ruled against a 2018 U.S. Department of Justice legal memo that tried to frame the Federal Wire Act as applicable to all types of interstate gaming.

The First District Court of Appeals rejected the President Donald Trump-era DOJ’s argument and in doing so handed a win to online gaming advocates. 

In 2011, the Office of Legal Counsel under President Barack Obama wrote that the 1961 Federal Wire Act was to be enforced only on sports wagering. 

The 2011 ruling opened the doors for states to operate regulated online gaming, including online poker and lottery sales. 

In 2018 the same office overturned that opinion, stating the Wire Act was “not uniformly limited to gambling on sporting events or contests.”

The LOC’s latest ruling led to a lawsuit from the New Hampshire Lottery Commission and its supplier NeoPollard, who argued the “reinterpretation had dramatic effects for state run lotteries, which use the interstate wires (including the Internet) to sell lottery tickets.” 

“The Court rejected the government’s argument that the case was not ripe for resolution, pointing out that the Department of Justice had previously threatened state run lotteries with prosecution under the Wire Act, and had not offered any reason for why its new opinion would not subject the lotteries and their vendors to criminal prosecution,” law firm Gibson Dunn said in a statement. Gibson Dunn represents NeoPollard. “On the merits, the Court held that the government’s reinterpretation of the Wire Act in 2018 was incoherent and inconsistent with the structure of the statute, thus restoring the 2011 interpretation that limited the Wire Act to sports betting.” 

New President Joseph Biden has said he supported the 2011 interpretation, and it was unclear whether his administration’s DOJ would continue arguing for the 2018 opinion in court had a ruling not come down so soon. 

The Wednesday decision could open the door for states to more aggressively pursue online gaming legalization now that fear of federal interjection has been dismissed. 

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