IGT Seeks Preemptive Court Judgment Against Any DOJ Prosecution Under Wire Act

Some contentious legal issues are like action movie villains. Maybe you’ve seen them bleeding out, chained to a boat that’s swallowed by a shark which is subsequently blown to smithereens by a torpedo. If you haven’t actually seen the body, however, there’s a good chance they’ll be showing up again in the final act.

That’s why International Game Technology, or IGT, wants to see the Wire Act’s body.

On Tuesday, it filed a petition with the District Court for Rhode Island, asking for declaratory relief against the Department of Justice. In plain English, it wants a guarantee that the same ruling granted to the New Hampshire Lottery Commission by the First Circuit Court of Appeals also applies to itself.

Fundamentally, the problem is that the First Circuit merely torpedoed the shark. It didn’t retrieve the villain’s body and put it in the ground. Neither did the DOJ itself, even after 26 state Attorneys General wrote it a letter asking it to do so.

Just like that movie villain, everyone knows that the DOJ’s interpretation of the Wire Act will never win in the end. At this point, though, the movie’s gone on long enough, and it’s time to roll the credits.

Recapping the Wire Act battle

Here at Online Poker Report, we’ve invested several tons of digital ink in covering the Wire Act case. In case you missed all that previous coverage, however, here’s the nutshell version.

In 1961, the US federal government passed a law called the Interstate Wire Act. Its purpose was to prevent people from circumventing state laws by placing sports bets over the phone with a bookie in another state. Fast forward a few decades, and the definition of “wire communication” has expanded to include the internet.

Not content with preventing only interstate sports betting over the internet, the DOJ pressed on. Exploiting the specific phrasing of the law, it reinterpreted some of its clauses to include all betting.

The intent of the move was to hinder efforts to legalize online casinos and poker in the US. However, the new interpretation also posed a potential problem for interstate lotteries like Power Ball and Mega Millions. 

The New Hampshire Lottery and its technology provider NeoPollard sued and won. The District Court not only ruled them exempt but ordered the DOJ’s opinion to be set aside.

The DOJ appealed and lost. However, the First Circuit only upheld the portion of the decision pertaining to those specific plaintiffs. It vacated the order to set aside the opinion itself.

What IGT wants

The good news is that the court’s logic should apply to anyone and everything that isn’t sports betting. The bad news is that the First Circuit’s decision leaves wiggle room for the DOJ to force the issue.

At the moment, the DOJ shows no indication of wanting to enforce its interpretation of the Wire Act. However, that’s partly due to the current administration’s hands-off stance when it comes to state efforts to expand gambling. In another few years, we could have a new president and a chance for the Wire Act to make a desperate last stand.

Unfortunately, there are many holdovers from the previous administration at the DOJ. That, combined with apathy and it being a low priority, is probably why it hasn’t just retracted the opinion on its own.

What that means, in IGT’s own words, is:

IGT’s entire non-lottery gaming business is subject to prosecution, and DOJ has offered only the promise of a 90-day heads up before it can subject IGT’s lottery business to the Wire Act as well.

The same applies equally to every other entity not named “New Hampshire Lottery Commission” or “NeoPollard Interactive.”

What “declaratory relief” means is that IGT wants the court to say, affirmatively and up front, that it has the right to use the wire system for non-sports betting, even across state lines, as long as it complies with all other relevant laws.

Receiving that wouldn’t necessarily mean everyone else is safe. However, it would make it even more apparent to the DOJ that it’s time to let its Wire Act opinion die.

How will the DOJ respond to IGT’s complaint?

There are two main possibilities from here.

The first is that the DOJ does nothing. It can simply choose not to respond to the complaint. In that case, the judge will rule in favor of IGT, and everyone can call it a day.

Because the First Circuit left the door open a crack, however, the DOJ can still try to force it open. It’s hard to imagine what grounds it would have for doing so, but it could try to invent some.

For instance, it could argue that the original judgment really only means that the Wire Act doesn’t apply to lottery products. If that were true, the status of casino games and poker would remain ambiguous.

IGT filed its complaint in Rhode Island, which is part of the First Circuit. Fighting the case again in the same jurisdiction would mean the DOJ’s chances of success would be slim to none. However, if its goal is simply to be a thorn in the side of the online gambling industry, this is its chance to end the movie on one last jump scare.

About the Author

Alex Weldon

Alex Weldon

Alex Weldon is an online gambling industry analyst with nearly ten years of experience. He currently serves as Casino News Managing Editor for Bonus.com, part of the Catena Media Network. Other gambling news sites he has contributed to include PlayUSA and Online Poker Report, and his writing has been cited in The Atlantic.
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