DOJ delays expanded Wire Act opinion enforcement to 2020


us-doj-wire-act-opinion-enforcement-delayThe US Department of Justice is delaying – but not abandoning – its intention to enforce its new view that the Wire Act applies to other forms of online gambling beyond sports betting.

On Wednesday, Deputy Attorney General Jeff Rosen issued a memo instructing US Attorneys that the DOJ was extending the ‘grace period’ under which federal prosecutors “should not apply the Wire Act to non-sports-related betting or wagering.”

The grace period now extends to December 31, “or 60 days after entry of final judgment in the New Hampshire litigation, whichever is later.” The DOJ cautioned that this extension “is an internal exercise of prosecutorial discretion and does not create a safe harbor for violations of the Wire Act.”

Backing up for a second, the DOJ’s Office of Legal Counsel (OLC) publicly issued a new opinion in January stating that the 1961 Wire Act, which barred the transmission of wagering information across state lines, now applied to pretty much all online gambling except the online horse betting covered by the federal Interstate Horseracing Act.

The DOJ originally delayed enforcement of its highly controversial – and legally sketchy – new opinion until April 15 in order for lotteries and state-licensed online casino and poker operators to bring their activities into compliance. That deadline was subsequently extended to June 15.

Earlier this month, a federal court judge struck down the new OLC opinion, upholding a challenge brought by the New Hampshire Lottery Commission. However, the same judge had predicted that the case was likely to be appealed by whichever party came out on the losing end, and the DOJ appears interested in exercising that right, even if Wednesday’s memo says only that the department is “evaluating its options.”

The dodgy legal reasoning behind the OLC’s new opinion convinced many observers that it’s a backscratching favor to Sheldon Adelson, the Las Vegas Sands casino boss who is one of the Republican party’s biggest campaign contributors. Adelson is an avowed foe of online gambling who appears to have been outraged by a 2011 OLC opinion that limited the scope of the Wire Act to sports betting, thereby allowing states like New Jersey to license online casino and poker operations.