A judge in U.S. District Court in Rhode Island has affirmed the prior U.S. Department of Justice (DOJ) opinion that the 1962 Wire Act applies only to sports betting, and not to online poker or casino gaming, in holding for gaming supplier IGT in the company’s lawsuit against the U.S. government.
The Wire Act was initiated by then-U.S. Attorney General Robert Kennedy in his ongoing battle against organized crime, which at the time controlled the wire services that enabled illegal wagering at bookies across the nation. It held that interstate transmission of wagering information via telegraph or telephone wire was illegal.
The Wire Act was for years used by opponents of legalized online gaming as the reason iGaming was illegal. Then, in 2012, the Justice Department under President Barack Obama issued an opinion that the Wire Act applied only to sport betting. This opinion opened the door for states to authorize online gaming, which several did.
In 2018, the DOJ under President Donald Trump reversed the prior opinion, holding that the Wire Act did in fact prohibit online gaming. The first to challenge that ruling was the New Hampshire Lottery Commission, which had instituted an iLottery. The lottery took the Trump DOJ to court in 2020, and won, with the First Circuit Court of Appeals ruling in the lottery’s favor on January 20, 2021, the day Joe Biden took office as president. The Biden DOJ declined to appeal the decision.
Last year, IGT, the largest supplier of lottery and iGaming services in the U.S, filed a lawsuit against the Justice Department seeking clarification of the online gaming issue. Last week, Rhode Island District Court Judge William Smith agreed with IGT that the Wire Act applies only to sports betting.
“The Court holds that the threat of prosecution faced by IGT, both for its lottery and non-lottery businesses, is credible enough to meet the requirements of proving an injury-in-fact,” Smith wrote in a 24-page ruling.
“The idea that the Wire Act will ever be expanded to cover interstate lottery, mobile casino or (online poker) is dead and buried,” Jeff Ifrah of Ifrah Law PLLC told US Gaming Review.
Others warned that the issue could still be reversed if Republicans win the White House in 2024.
“The Biden DOJ has never had any particular appetite for enforcing or advancing the opinion that came out in the Trump years,” said Dickinson Wright attorney Gregory Gemignani, according to pokerfuse.com. “But this ruling wouldn’t necessarily prevent (a future DOJ) from using the Wire Act against somebody else. If they did that, they would scare the hell out of the market.”
