U.S. interstate online poker clears last legal hurdle

U.S. interstate online poker clears last legal hurdle
Poker writer Geoff Fisk profile photo
Geoff Fisk
Posted on: March 19, 2021 12:21 PDT

DOJ doesn’t appeal January ruling on the Wire Act

The long-running battle over the legality of interstate online poker networks finally reached its end Thursday. The final result stuck a major victory for U.S. poker players.

The U.S. Department of Justice chose not to appeal a January ruling from the First Circuit Court of Appeals, which declared that the federal Wire Act only applied to sports betting. The Wire Act mandates that all financial transactions related to sports betting can’t cross state lines.

The Department of Justice issued an opinion on the Wire Act in 2018 that attempted to include all gambling transactions. This opinion put the future of interstate poker in jeopardy in the U.S., with some states offering regulated online poker hesitant to enter into multi-state agreements.

The New Hampshire Lottery challenged that opinion, as the DOJ ruling on the Wire Act could have potentially restricted interstate lottery sales as well. A joint lawsuit filed by several lottery interests, and led by the New Hampshire Lottery, made it to the First Circuit Court of Appeals.

The court sided with the New Hampshire Lottery in a January 2021 ruling. The DOJ could have appealed that ruling, but the First District Court announced Thursday that the DOJ won’t appeal.

The Wire Act still applies to sports betting, as states offering legal sports wagering can only take bets made from within their respective states. Online poker operators, however, now have clearance to share player pools with other states, pending legal agreements among the states.

The potential for regulated online poker in the U.S.

Nevada, New Jersey, and Delaware allow poker operators to share player pools, through a pact called the Multi-State Internet Gaming Agreement (MSIGA). The participating states entered into the MSIGA prior to the 2018 DOJ opinion on the Wire Act.

The DOJ’s change in stance on interstate poker in 2018 put the future of the MSIGA in jeopardy. Pennsylvania, which launched legal online poker in November 2019, chose not to enter into any kind of interstate poker agreement.

That decision from Pennsylvania gaming regulators prevented its lone regulated poker site (PokerStars PA) from merging with PokerStars New Jersey, which launched in 2016. With the Wire Act hurdle officially out of the way, Pennsylvania could choose to opt-in to the MSIGA.

PokerStars PA will soon be joined by BetMGM/partypoker and WSOP/888 platforms in the Pennsylvania market. All three of Pennsylvania’s current and upcoming poker sites could potentially share player pools with other states in which they operate.

PokerStars, BetMGM/partypoker, and WSOP/88 all operate in New Jersey. PokerStars is also live in Michigan, with BetMGM/partypoker expected to launch soon in the Great Lakes State.

Michigan already has laws in place to allow its poker operators to enter into shared player liquidity agreements. Pennsylvania would have to pass similar legislation to enter into an agreement like the MSIGA, but that seems much more likely after Thursday’s landmark announcement from the First District Court of Appeals.

Featured image source: Flickr/jnn1776