Online poker wins as DOJ loses again on Wire Act

Jon Pill
Published by:
Posted on 01/21/2021

The wheels of justice turn slowly, and not always in the right direction, but they do turn. This week, those wheels ran over — ironically — the Department of Justice’s 2018 opinion on the Wire Act. This is potentially a significant blow landed in favor of broader legalization for online poker.

The First Court of Appeals sided with the State of New Hampshire against the DOJ. The DOJ brought the appeal after the District Court sided against them in June 2019.

The 2018 opinion produced by the DOJ treated lotteries (and most other forms of gambling) as covered by the Wire Act. New Hampshire, whose State Lottery is a big earner both for the state and the private companies that run the lottery, didn’t take this lying down. They took the DOJ to court and won.

The Wire Act is a piece of 1960s legislation that controls the movement of money across state lines for the purposes of gambling. It was part of the backdrop for Black Friday and has become something of a boogeyman for U.S. poker players. However, in late 2011 (too late to be of use in PokerStars or Full Tilt’s Black Friday defense), the DOJ ruled that the Wire Act applied only to sports betting. Online poker and, more importantly for this case, lotteries were not covered.

In 2018, the DOJ changed their minds about that, publishing the memo which has been so hotly debated in two courts.

If the DOJ wants to push this further, there are additional courts they can run to. But given the cost to the taxpayer, it may be that they will call it quits at this point.

Time to celebrate?

Whether this memo ends up as DOJ policy or in the circular filing cabinet will provide some clarity for the online poker world. So far Pennsylvania has balked at joining the combined player pool with New Jersey, Nevada, and Delaware out of fears that it might fall foul of the memo.

Some media outlets have speculated that the memo was a result of Sheldon Adelson’s influence on the Trump administration. Adelson was an anti-online poker advocate and a huge donor to Trump and other Republicans. However, there is not any clear evidence of direct corruption, though the 2018 opinion is eerily similar to one written up by Adelson-funded activists.

The advent of the more online-poker-friendly Biden administration may well herald a change in direction for the DOJ. If so, this could be the end of this story. If not, the case may well see the inside of the supreme court. With two new conservative justices on the bench, it is hard to tell whether puritanism or libertarianism will win out.

However it happens, whether this memo lives or dies will be a temperature take for the legal system regarding online poker. If the memo is canned it could embolden other states to regulate online poker, for better or for worse.

For now though, poker players can go back to ignoring the Wire Act. That’s a problem for sports bettors to worry about, the suckers.

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