The long-awaited Department of Justice opinion on the Wire Act that was expected to arrive in December 2018 arrived on Monday when it issued the body issued a new legal interpretation of the 1961 Wire Act in a politically-motivated effort that seeks to delay efforts by various states to legalize online gambling. The memo, allegedly, effectively came at the request of Las Vegas Sands, the world’s largest developer of land-based casinos, and Sheldon Adelson, its chief executive.
The Department of Justice’s new opinion retracted most of what was stipulated in the 2011 DOJ opinion on the same subject – the 2011 opinion concluded that the scope of the 1961 Wire Act only applied to sports betting. Following the 2011 opinion, several states began to prepare to venture into online gambling with some even making enough progress to have the sector legalized. However, the legislatures of these states did all these thinking that they had the cover of the 2011 opinion as an affirmation of the legality of the interstate gaming operations.
A Broader Interpretation
While the new opinion acknowledges that it is quite rare for the Department of Justices to issue new opinions on any matter, they chose to do so in this case amidst the ongoing government shutdown. The DOJ’s opinion, which is dated November 2 now says that the Wire Act does apply to other forms of gaming and not just sports betting. The department’s opinion further stated that the scope of the Wire Act was not in any way affected by the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2007 – the UIGEA exempted daily fantasy sports in its online gambling restrictions and the new opinion reminds the industry that no such exemptions exist.
Is Gaming Expansion in Pennsylvania in Trouble?
The Keystone State legalized online gambling back in October 2017 and since then the state has been working diligently to ensure that its gambling expansion plans are realized. 2019, for instance, is supposed to be the year that the state finally moves forward with the launch of its online gambling industry. With the new opinion, delays are expected but there is a solid chance that the memo will have little to no effect on Pennsylvania’s gambling expansion timeline.
One aspect of the gaming industry that many people have expressed concerns about is banking. In essence, the new DOJ opinion implies that banks stand a risk of getting sued if money crossed state lines while changing hands for gambling. Banks in the United States are usually very risk-averse when it comes to federal law. Still, the gaming expansion momentum is still growing strong and therefore all that can be done now is to wait and see how it all plays out.