The U.S. Department of Justice (DoJ) has released a new opinion regarding the interpretation of the Wire Act last examined on December 23, 2011. The department is looking to undo a previous ruling and setback online poker and gaming across the United States.
It’s good to be alive, Sheldon Adelson, the casino mogul, must think right now.
It’s probably even better when the Department of Justice (DoJ) has just signalled their first step towards undoing a lot of progress. While we’re certain that the constant lobbying by Mr Adelson has had a lot to do with the present predicament, we’ll focus on the facts.
On Monday, a new document (dated November 2, 2018), an opinion issued by the U.S. Department of Justice, appeared online. The 23-page document called “Reconsidering Whether the Wire Act Applies to Non-Sports Gambling” may now seek to undo an interpretation of a legislation last examined in 2011. Let’s set the backdrop here.
The Wire Act – A Much Contested Issue
Understanding the Wire Act is not too complicated. Basically, this is a very old legislation passed back in 1961. The law’s primarily focus was sports betting, but it was later used to also be a common argument against all forms of gambling and gaming, poker included.
While certain places, such as New York, consider poker to be a game of skill, the Wire Act has extended to disrupt the online poker segment as well.
In the meanwhile, suffice it to say that after poker was largely snuffed out in the United States in the late 2000s, two states, namely New York and Illinois sought to start rebuilding their gaming industries.
So, the pair challenged DoJ and demanded that the Office of the Legal Council (OLC) give them a ruling whether the Wire Act could apply to activities beyond sports betting or it was strictly limited to placing wagers on sporting events.
The Department’s Office of Legal Counsel (“OLC”) has analyzed the scope of the Wire Act, 18 U.S.c § 1084, and concluded that it is limited only to sports betting.
The DoJ ruling came in December, 2011, with the institution ruling that only sports betting was excluded under the Wire Act. This didn’t exactly give Illinois and New York the green light to introduce online poker, for example, but it helped them develop their lotteries – some of these lotteries operate across state borders these days.
The Significance of the New DoJ Opinion
It’s at this point that we should consider the new opinion released by DoJ. Rumors were swirling as early as December 2018, that the Department of Justice was preparing some form of a new interpretation of the law.
The opinion is not yet a legal tool for settling scores, but it could very quickly become one. More unpleasantly – the goal here is not to destroy the online industry, for that would be impossible.
Rather, lobbyists and owners of land-based casinos who are firmly entrenched in their old ways find it easier to disrupt innovation and narrow the scope of shared liquidity, which would in turn, they hope, decrease interest for online gaming.
This is partly true. Without cross-state gaming and the shared pools, fledgling industries such as online poker could be in danger. The shared liquidity scheme in Nevada, New Jersey, Delaware and soon Pennsylvania has been a welcome move by players.
If the new opinion is enforced, though, it can target the way data is exchanged between states, specifically where gaming operations are concerned.
The effect? A disruption.
States Not at All Happy
Interestingly enough, there’s a very clear discrepancy between what states want and what the Department of Justice thinks states need. Places that have legalized the industry have done so on a largely strong political majority and public approval.
Trying to uproot these laws would incur the wrath of many. Not that lobbyists care much at the moment. The idea of disrupting cross-border gaming can effectively lead to falling numbers, job losses and fewer incentives to play.
States, such as New Jersey, do have the experience fighting and challenging federal laws. In May 2018, New Jersey single-handedly bested the federal ban preventing sports betting from becoming legal. It did spend around $8 million trying to fight off the ban, but it managed nonetheless.
Now, a new spanner in the works of betting and gambling could lead to another conflict in court. However, shockingly, in their opinion, DoJ have said that while they recognize the right of states to challenge their decision, states have very little say in what happens on a federal level.
Or rather, that no state decision can supersede the decision taken by the Department of Justice. Many have said, though, that if DoJ enacts its opinion, litigation will follow, and there will be no shortage of volunteers to be in the front lines.
Cui Bono? Or, Who Wins Out of This Mess?
It’s very simple to pinpoint the culprits. It’s rather easy to guess, too. The majority of opponents are mostly technologically illiterate, with high political office or an empire of their own. Sheldon Adelson, the casino mogul, has long been the main proponent of putting the crackdown on all online activities.
According to the Washington Post, this is precisely what’s happening now. The underlings of Mr. Adelson have been rather gleeful, too. Ex-senator Blanche Lincoln congratulated the Department of Justice decision:
Today’s decision seamlessly aligns with the Department’s longstanding position that federal law prohibits all forms of Internet gambling, as well as with Congress’s intent when it gave law enforcement additional tools to shut down the activity through the overwhelmingly-passed Unlawful Internet Gambling Enforcement Act in 2006.
Ms. Lincoln mentioned “morality” as one of her key points. There’s nothing moral in what lobbyists are doing for the sake of a select few individuals who continually fuel the anti-online gaming rhetoric.
Poker, casinos and sports betting have proven a massive success for the smart and intelligent gamer of the 21st century. They are cheap, exciting and largely secured and protected from cheating.
Also, they don’t make demands on people to physically attend. This is what Mr. Sheldon and his coterie are struggling to grasp. Instead of moving with the times, Mr. Sheldon has decided to try and pull everyone back in the past.
So far he seems to have been successful.
