New Hampshire Lottery Commission wins case against 2018 Wire Act Opinion
Court rules Wire Act does not include igaming, online poker or ilottery in huge win for the industry
The First Circuit Court of Appeals has ruled in favor of the New Hampshire Lottery Commission (NHLC) in its case against the 2018 DOJ Wire Act Opinion.
In June 2019, the NHLC filed a case against the DOJ’s 2018 Wire Act Opinion that expanded the Wire Act’s restrictions to include other forms of interstate online gambling like lottery and poker, as well as sports betting.
Industry lawyer and supporter of the case Jeff Ifrah hailed the decision as a victory for states’ rights, for the clear reading of federal statutes and for the gaming industry and its customers.
“Today’s decision will hopefully put to rest the question of whether federal law prohibits states from licensing internet gaming within their borders and compacting with each other to allow such gaming on an interstate basis,” Ifrah said in a statement.
And we win! The 1st Circuit upholds the District Court's Opinion and rejects the OLC's opinion. The 1st Circuit holds that the Wire Act only (and obviously) applies to sports events and contests! Big Win! @iDEA_Growth #sportsbetting #wireact
— Jeff Ifrah (@jifrah) January 20, 2021
The Wire Act dates back to 1961 as part of a package of bills to curb the activities of organized crime, and made it a crime to transmit information related to bets or wagers on a sporting event across state lines.
The interpretation of the act was reviewed in 2011, and soon after the Office of Legal Counsel concluded it only applied to sports betting.
In 2018, The Trump Administration’s DoJ called for a renewed guidance, which led to a new opinion maintaining that the Wire Act prohibited all betting online.
Until now, uncertainty around the new opinion and the lengthy case put by the NHLC has hindered developments in the online gaming sector, particularly in operators expanding into online poker in states where it is legal.
This latest ruling will present states considering legalizing igaming and online poker with fewer roadblocks in terms of where and where licensees must situate their servers and hardware.
It also opens up the case for extending interstate poker liquidity beyond New Jersey, Delaware and Nevada.
Outgoing Entain CEO Shay Segev commented on the potential impact of the ruling on online poker in the US, where the company’s partypoker brand was once the clear market leader as part of PartyGaming before UIGEA forced the company to make a hasty retreat in 2006.
Segev said US online poker had “massive potential” and that the biggest barrier so far to its growth had been liquidity. He added: “We definitely see poker as a big opportunity for us to lead. It’s very exciting and we see ourselves as a potential leader in this space.”
Meanwhile, Eilers & Krejcik Gaming’s Chris Grove commented: “Good news for the industry. Hard to see this being a priority for the incoming administration but federal law and policy still creates some meaningful roadblocks for online gambling generally and sports betting specifically.
“Online gambling stakeholders have a tough decision ahead: Start a federal process aimed at dismantling those roadblocks that could result in unintended consequences, or leave it alone and deal with the low-level headache,” he added in a LinkedIn post.
Distinguished Fellow of Gaming Law at UNLV Boyd School of Law Anthony Cabot suggested the ruling was “likely the end of the line for the anti-gambling proponents” as he does not expect the Biden Administration to pursue an appeal.
“Even if it did, the Supreme Court is unlikely to entertain one. This may have been the last hurdle for states considering legalized online casino wagering,” Cabot added.