The use of the 1961 Wire Act as justification for restricting or banning internet gaming is most likely a thing of the past, after the U.S. Department of Justice failed to appeal the decision of a lower-court ruling that the law applies only to sports betting.
The DOJ let the June 21 deadline pass to appeal a decision of the First Circuit Court of Appeals that upheld a lower court ruling in a lawsuit that sought to ban internet gaming on the basis of the 1961 law, which was passed under then-Attorney General Robert F. Kennedy as a way to curtail sportsbook activity that was at the time one of the largest business ventures on organized crime.
The Wire Act banned using a “wire communication facility” for gambling purposes. When the law was passed, that clearly referred to the wire services controlled by the mob that transmitted wagering data for illegal sportsbooks around the country. After online poker popularity spread in the early 2000s, and offshore internet casinos followed, the Justice Department cracked down on illegal offshore operators in 2011, resulting in indictments of major iGaming operators in what became known as “Black Friday.”
Following those indictments, gambling opponents began to use the Wire Act to target increasingly popular poker sites that shared player pools between states. However, in that same year of 2011, the Justice Department issued an opinion that the Wire Act applied only to sports betting, which was still illegal in the U.S. at the time outside of Nevada and restricted parlay betting in a few other states.
After the Trump administration began in 2017, the DOJ reversed its opinion, holding in a 2018 opinion that the law could be applied to online gaming. In 2019, the DOJ stated that all form of interstate online gambling were illegal, including interstate poker player pools and interstate lottery jackpot pools.
The New Hampshire Lottery, which was running its servers from another state, filed suit against the DOJ, and a U.S. District judge held for the state, striking down the new DOJ legal opinion.
Thanks to the Covid-19 pandemic, the DOJ’s appeal was not heard until January 2021, when the District court’s ruling was upheld. By that time, the Biden administration was taking over, and as a candidate, Joe Biden had aid that DOJ would revert to the 2011 view of the Wire Act. With legal online gaming, poker and sports betting on the rise, some new jurisdictions like Michigan had placed interstate player pools in their online poker legislation.
The federal government declining to appeal the appellate court’s ruling essentially ends the issue of the Wire Act being used to restrict or ban online gaming. However, a group of 26 state attorneys general is attempting to hedge against the possibility of a future administration again reversing the decision.
Led by Michigan Attorney General Dana Nessel, Ohio Attorney General Dave Yost and New Jersey Attorney General Gurbir S. Grewal, the state officials signed onto a letter urging the DOJ to formally disavow its 2018 opinion and reinstate the 2011 position.
New Jersey’s Grewal accompanied his signature on the letter with a formal statement:
“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,” Grewal said. “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.”
The nonprofit group iDEA Growth, which advocates for the growth of online gaming, lauded the DOJ’s decision as “a victory for states’ rights, for clarity in the reading of federal statutes, and for the gaming industry and its consumers.”
