DOJ’s Wire Act Stall Game Continues

By way of continuing to waste government resources in the names of Sheldon Adelson and crony capitalism, the US Department of Justice has been back in court in recent days in its “Wire Act” appellate case in the US’s Third Circuit. At stake, of course, is the immediate future of interstate online poker in the States, along with most other forms of interstate online gambling.

Just hours before a December 20 deadline, the DOJ filed its latest brief in its defense against the State of New Hampshire and its lottery agencies, which triumphed in a lower court last year and nullified a controversial DOJ “reversal opinion”. The opinion was largely bought and paid for by Adelson, the CEO of Las Vegas Sands who is a fierce opponent of online gambling.

Adelson’s goal for many years has been to wipe out what he perceives as looming competition to his Vegas casinos (Venetian, Palazzo) by any means necessary, from failed RAWA (Restore America’s Wire Act) legislation to pressuring the DOJ to continue trying to restore the antiquated and legally inaccurate interpretation that the Wire Act applies to almost all gambling, not just sports betting. All that led to New Hampshire’s legal win, yet the DOJ seldom takes legal setbacks without a struggle.

The recent filing by the DOJ continues to hammer on an argument that has already failed once, that the case by New Hampshire and its lottery agencies should be tossed out, because the DOJ hasn’t actually prosecuted them for supposed Wire Act violations. Instead, since New Hampshire filed its case, the DOJ maintains it has the right to litigate the whole Wire Act thing by chilling effect, saying, “We haven’t really decided yet if the Wire Act applies to multi-state lotteries.” Nor is the DOJ in any rush to decide.

But of course it would apply, which is why New Hampshire, supported by many other US states, filed its suit. And due to the way the initial Wire Act was written, way back in 1961, it’s an all-or-nothing deal: Regulated interstate online poker would be just as legal as interstate lotteries such as Powerball and Megabucks.

The DOJ has even been forced to issue a series of memoranda to its US Attorney Offices across the country, advising them not to go forward with prosecutions against states or other entities while the Wire Act’s legal status remains disputed. The latest memo was issued just a couple of days ago, this time pushing back a possible beginning of prosecutions until June 30, 2020, or the “entry of final judgment in the New Hampshire litigation, whichever [is later.”

That these memos need to be issued is all to clear a depiction of the chilling effect described above. As it applies to interstate online poker and the pooling of players, it delays operators from laying out the investments needed to expand the game across a growing number of US states.

It is clear that the old Wire Act must be destroyed once and for all. Otherwise, regulated US online poker will always be hampered. Sadly, even if the DOJ again loses on appeal, as most legal experts predict, the battle is likely to be submitted to the US Supreme Court for one last gasp of consideration. This will push a likely final word in the case back to 2021, perhaps even 2022.