IGT triumphant in long-awaited Wire Act decision

International Game Technology (IGT) has won its legal challenge against the US Department of Justice (DOJ) over its controversial 2018 legal opinion concerning the Wire Act.

In 2018, the DOJ issued the opinion criminalizing all forms of interstate online gambling under the Wire Act, despite the fact the act previously applied to sports betting only.

Introduced in 1961, the Wire Act prohibits the transmission of betting information across state lines, and so the extension of this legislation from not only sports betting, but also to cover online casino, poker and lottery, represented a bitter blow to the these verticals.

Multi-state online poker shared liquidity agreements were among those affected by the interpretation, with as many as 13 US states opposing the controversial DOJ opinion, which was successfully challenged in the courts by the New Hampshire Lottery Corporation (NHLC) in February 2019.

At the time, the United States District Court for the District of New Hampshire ordered the DOJ to set aside the opinion under the Administrative Procedure Act, a decision which was later vacated by the same court in January 2021.

IGT filed its own lawsuit against the DOJ in November 2021, with the lottery and online gambling technology supplier filing a declaratory claim for damages and asking the United States District Court for the District of Rhode Island to intervene against the 2018 DOJ Office of Legal Counsel opinion.

In addition to the claim for damages, IGT cited prior accepted interpretation of the act, suggesting that the 2018 reinterpretation “fundamentally imperils” this stance, placing the business at risk as well as state lotteries and the commercial gaming industry alike.

IGT’s suit asked for the court to declare the Wire Act applies only to “bets or wagers on any sporting event or contest” and that the firm was seeking compensatory relief for its costs.

In March, the DOJ filed a lawsuit seeking the dismissal of the IGT suit, arguing that IGT had not proven it faces an imminent or substantial threat of prosecution.

Considering the case, US District Court Judge William Smith highlighted the uncertainty arising from the DOJ’s interpretation, suggesting there should be a definitive ruling on the issue, something which could only be achieved by forcing the DOJ’s hand.

“Given these concerns, there is no question that a judgment ‘will serve a useful purpose in clarifying and settling the legal relations in issue’ and afford significant relief ‘from the uncertainty, insecurity and controversy giving rise to the proceeding,’” Smith wrote in a 24-page summary judgment.

“Like the NHLC plaintiffs, IGT “should not have to operate under a dangling sword of indictment while DOJ purports to deliberate without end the purely legal question it had apparently already answered and concerning which it offers no reason to expect an answer favorable to the plaintiffs,” the justice added.

Summarizing his remarks, Judge Smith dismissed the DOJ’s motion to dismiss the IGT suit, arguing that it had proved its case and granting the supplier declaratory relief.

“As for the scope of that relief, both parties have been clear that the relief sought by IGT is the same as that afforded in the NHLC litigation, and thus a declaratory judgment will bind the United States ‘everywhere plaintiffs operate or would be otherwise subject to prosecution,’” Smith wrote.

“Because the Court finds there is no dispute of material fact, judgment shall enter as a matter of law, and Plaintiffs’ Cross-Motion for Summary Judgment is GRANTED, “he concluded.

The DOJ has not commented publicly following the court ruling.