Department Of Justice Preparing To Reverse Opinion That Wire Act Only Applies To Sports Betting

The Department of Justice is preparing an opinion that will likely say that the Wire Act applies to all forms of online gambling and not just sports betting.

That would be an apparent reversal of the 2011 Office of Legal Counsel opinion that the Wire Act only applies to sports wagering.

The new opinion could come down this week. The exact content of the opinion is unknown, and we have not seen the actual opinion. It’s also not a guarantee that the opinion is ultimately issued, sources tell us.

If the opinion comes down, it would likely be buried later this week, just before the Christmas holiday.

The news also comes amid reports that a pair of senators are planning to introduce sports betting legislation as soon as today. That legislation would put the DOJ in charge of approving state-level sports betting laws.

What would this mean for online poker, online casino and sports betting?

It’s not clear that a reversal of the opinion would functionally change anything in the United States gaming landscape.

After all, even under the existing OLC opinion, legal intrastate online sports wagering already takes place in New Jersey and Nevada, with more states coming soon. Online gambling is legal in Nevada, New Jersey, Delaware and soon Pennsylvania.

The biggest question might be its impact on an interstate poker compact involving Nevada, NJ and Delaware, which allows those states to pool poker players across state lines. But even that might not be affected, depending on how the opinion is crafted.

“A reversal of the 2011 Office of Legal Counsel memo would be a titantic shift in the Department of Justice’s view of the Wire Act,” said John Holden, an academic and professor at Oklahoma State University who is an expert on the Wire Act and matters relating to sports betting.

“An opinion is guidance of the DOJ’s view of the scope of the statute, as opposed to a binding interpretation law, which would need to be passed by Congress. But this is not good news for poker, and online casinos, though it remains unclear what effect this purported policy shift would have on state-regulated markets.”

There is also plenty of existing case law that says the Wire Act only applies to sports betting, outside of anything the DOJ says.

It’s also pretty clear from the legislative history that the Wire Act was indeed only intended to deal with sports gambling. More from Holden here and here.

Recent rumblings on the Wire Act

Some lawmakers and lobbyists have been pushing for a direct rebuttal of the 2011 OLC opinion issued under the DOJ of President Barack Obama.

Sen. Lindsey Graham has used the change at the top of the DOJ, with Jeff Sessions leaving the Attorney General position, as a way to bring up the topic of online gambling and how it relates to the Wire Act. Rep. Jim Sensenbrenner also recently sent a letter to the DOJ asking for guidance regarding the Wire Act.

The issuing of a new opinion would appear to be an appeasement of Las Vegas Sands Chairman Sheldon Adelson, who has long been an opponent of online gambling in all forms.

Enforcement of the Wire Act?

A shift in emphasis on enforcing existing laws from the DOJ, of course, would be a welcome development to many in the United States, including the nascent legal online sports betting and gaming industries in the US.

Aside from 2011’s Black Friday — when the DOJ seized the domains of several US-facing poker sites (including PokerStars) — a thriving offshore online gaming industry still serves the US with abandon for all forms of gambling, sports wagering included.

If the new opinion puts an emphasis on the DOJ trying to stop illegal online sportsbooks, casinos and poker rooms, that could be a big deal. But it’s not at all clear that’s what the DOJ has in mind in here.

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