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Jonathan ZaunMarch 06, 2019
March 06, 2019

Online Gambling: DOJ Extends Wire Act Window

As states with a vested interest in legal online gambling file lawsuits in defense of their local industries, the U.S. Department of Justice (DOJ) made its first retreat regarding its recent Wire Act ruling.

In a memo signed by outgoing Deputy Attorney General Rod Rosenstein last Thursday – which was obtained by iGaming industry outlet CDC Gaming Reports – the DOJ advised all U.S. Attorneys, assistant attorney generals and the director of the FBI that enforcement of the Wire Act would be extended by an additional 60 days:

“We have decided to extend that window an additional 60 days (through June 14, 2019).

Providing this extension of time is an internal exercise of prosecutorial discretion and does not create a safe harbor for violations of the Wire Act.”

As part of the latest DOJ decision, Rosenstein originally provided iGaming operators with a 90-day window in which to comply with the Wire Act’s reinstated restrictions on interstate iGaming.

Speaking to Gambling Compliance, DOJ spokesperson Nicole Navas made it clear that the as yet to be publicized memo was indeed accurate:

“I can confirm there has been a 60-day extension to the 90-day deadline for gambling companies to comply.”

Online Gambling: Reviewing DOJ’s History of Wire Act Flip-Flopping

In an opinion titled “Reconsidering Whether the Wire Act Applies to Non-Sports Gambling” – which was drafted on November 2 of last year and made public on January 14 – the DOJ’s Office of Legal Counsel (OLC) revised its stance on a federal law known as the Wire Act of 1961.

The law prohibits any transmission of sports betting related business across state lines using telephonic means, and until 2011, the DOJ applied it to all forms of iGaming – including online poker and casino games.

But in December of 2011, the OLC clarified its stance on the Wire Act by limiting the law to online sports betting only. In the years since, three states – Nevada, New Jersey, and Delaware – have launched legal and regulated online poker and/or casino industries, with Pennsylvania currently preparing to become the fourth.

The Keystone State’s preparations hit a hurdle in January though, after the latest OLC opinion reversed course and reinstituted the ban on interstate iGaming.

Last week, Kevin O’Toole – who serves as executive director of the Pennsylvania Gaming Control Board (PGCB) – told the state’s House Appropriations Committee that the new Wire Act opinion has led to a delay in implementation:

“There had been an expectation that those iGaming operators who were partnering with our casinos in Pennsylvania, if they already had infrastructure in another jurisdiction, that they could leverage that to reduce the cost of implementing iGaming.

But with that reinterpretation it became quite obvious that everything had to be on an intrastate basis, and that would probably be the biggest challenge, not so much of a challenge but a modest delay, to establish an adequate server location within the commonwealth of Pennsylvania.”

Online Gambling: Lawsuits Filed in New Hampshire Prompt Extension

In the days before the 60-day extension was put in place, U.S. District Court Judge Paul J. Barbadoro of New Hampshire grilled DOJ attorneys about the original deadline’s feasibility.

As the presiding judge in recent lawsuits naming the DOJ and Attorney General William Barr as defendantsfiled by the New Hampshire Lottery Commission (NHLC) along with its technology provider NeoPollard, in January – Barbadoro is said to require at least one month after oral arguments conclude to render a ruling.

Insisting that a 90-day enforcement window would cause Wire Act cases to be rushed, Barbadoro successfully convinced the DOJ to grant an extension.

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