Regulation

Stakeholders wary of DOJ appeal against Wire Act ruling

How much of an impact could a potential DOJ appeal against the judge’s ruling have, and should we be worried?

Online gambling stakeholders in the US celebrated a win this week with the New Hampshire District Court’s ruling that the Wire Act only applies to sports betting.

While the ruling, in favour of the New Hampshire lottery Commission (NHLC), is certainly a coup for lotteries, gaming tech vendors and online gaming operators, some stakeholders are wary of celebrating to small a success considering the likelihood that the Department of Justice (DoJ) will appeal the decision.

Chris Grove, MD for boutique gaming analyst firm Eilers & Krejcik believes the ruling to be “a step on a long path versus an end of the road.”

“There are still a number of federal levers that could be pulled to stymie the spread of regulated online gambling,” Grove said.

“That’s especially relevant if you subscribe to the narrative that the DoJ’s opinion was influenced by opponents of online gambling such as Sheldon Adelson.”

Casino investor Adelson’s influence in the DoJ’s revised Wire Act opinion has been flagged up by New Jersey Attorney General Burbir Grewal who filed a lawsuit against the DoJ in May, for failing to answer questions on Adelson’s lobbying efforts.

However, other stakeholders appear more positive about the ruling and believe the DoJ’s potential appeal will have minimal impact.

Industry lawyer Stephen Schrier told EGR NA he thought the Judge’s opinion would withstand scrutiny on appeal.

“The opinion by Judge Barbadoro is well reasoned and thorough. He carefully deconstructs the DOJ’s faulty opinion and supports a logical and proper interpretation of the Wire Act,” Schrier said.

Similarly, fellow of gaming law and advisor Anthony Cabot said the DOJ’s likely appeal would be “an unfortunate waste of taxpayer money.”

“In the interim, this should quell some of the anxiety surround the DOJ’s precipitous and politically charged change of direction. Judge Barbadoro’s decision is well reasoned and written,” Cabot added.

Following the ruling, the NHLC said it was satisfied with the judge’s comments, noting he took a “deliberative approach to the decision, thoroughly and carefully reviewing all issues and ultimately making a decision in the best interests of the citizens of New Hampshire.”

The future of the long battle against the Wire Act is certainly not over, particularly as a handful of other cases against the DoJ continue to gain pace, including one put by industry trade association iDEA Growth.

Department of Justice | New Hampshire | Regulation | Wire Act

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