US Department of Justice Appeals District Court Wire Act Decision
On the last possible day to file an appeal, the United States Department of Justice did so. It appealed the June 2019 decision from the US District Court for the District of New Hampshire that ruled against the DOJ and set aside its most recent Wire Act decision.
The District Court ruling found that the 2018 decision from the DOJ’s Office of Legal Counsel to reverse an earlier Wire Act decision was to be set aside. Essentially, the 2011 Wire Act decision from the same office was to stand, relegating the Wire Act applicable only to sports betting, not state lotteries or other forms of online gaming.
The DOJ took more than two months to file its appeal in the case but did so on August 16, more than two months after that District Court ruling.
BREAKING: The U.S. Department of Justice has appealed the order of a New Hampshire federal district court judge vacating its reinterpretation of the Wire Act as extending to all forms of gambling (not just sports betting). Today was the deadline for filing the notice of appeal. pic.twitter.com/naUu1BS3Hw
— Daniel Wallach (@WALLACHLEGAL) August 16, 2019
At this point, the First Circuit Court of Appeals awaits the official paperwork and will then decide if it will hear the case.
How Did We Get Here?
Technically, it started in late 2011 when the DOJ’s Office of Legal Counsel (OLC) at that time issued a decision regarding the scope of the 1961 Wire Act. The ruling was in response to several states that wanted to offer online lottery ticket purchases but were afraid of Wire Act conflicts. The OLC interpreted the Wire Act to apply only to sports betting, not any other form of online gambling.
With that, the gates for legal online poker and casino games, as well as lottery games, in the US opened.
However, Sheldon Adelson had long opposed online gambling and set about trying to overturn that decision. Most efforts were in the form of urging members of Congress to pass the Restoration of America’s Wire Act, which would have overturned that 2011 decision. But numerous attempts by several politicians to do so failed.
When friends of Adelson became a part of the Trump Administration in 2016, he had another opportunity. And that resulted in a new decision from the new OLC.
“Reconsidering Whether the Wire Act Applies to Non-Sports Gambling” was the opinion written in November 2018 but first made public in January 2019. It reversed the majority of the 2011 opinion.
That led to numerous states with online lotteries and those with internet poker and/or casino games stepping in to contest the decision in court. The New Hampshire Lottery Commission won the right to take the DOJ to court, along with its platform provider NeoPollard Interactive.
The case went to the US District Court, and Judge Paul Barbadoro eventually issued his ruling on June 3, 2019. It ruled against the DOJ. “The 2018 OLC (Office of Legal Counsel of the Department of Justice) is set aside.”
Nine days later, US Deputy Attorney General Jeffrey Rosen issued a memo instructing all US attorneys to refrain from any implementation of or prosecutions for non-sports betting-related activities under the 2018 Wire Act decision until the end of 2019, essentially giving the DOJ time to file an appeal or issue new instructions.
Soon after, a bipartisan group of Congresspersons attached an amendment to the 2020 Appropriations Act to stop all funding for enforcement under the 2018 Wire Act decision. The Representatives from three states submitted their amendment to H.R.3055 to read, in part, that “none of the funds made available by this Act may be used to enforce” the 2018 OLC decision.
However, the final version of H.R. 3055 that passed the House of Representatives on June 25 did not include that amendment.
In Under the Wire (Act)
On August 16, the last day for possible action, US Attorney General William Barr, the DOJ, and the United States of America filed an appeal of the District Court decision.
“Please take notice that all Defendants hereby appeal to the United States Court of Appeals for the First Circuit from the Court’s June 20, 2019 Judgment, as well as the Court’s June 3, 2019 Memorandum and Order and the Court’s April 12, 2019 Order.”
Industry Response
The trade group representing the US mobile gaming industry, iDEA Growth, responded quickly with a statement about the appeal.
Organization founder Jeff Ifrah said, “The Department’s action, while hardly unexpected, is certainly unwarranted. DOJ generally files appeals of adverse district court decisions as a matter of course. We hope that, rather than engaging in a protracted, expensive and ultimately unsuccessful legal fight, the Department will take this opportunity to negotiate a settlement which will focus the Wire Act and DOJ’s enforcement resources on the right targets – the unlicensed illegal offshore internet gambling operators who do not create jobs or tax revenue in the US and do not appropriately protect customers.”
.@iDEA_Growth responds to the appeal of the DOJ ruling that the Wire Act covers only #sportsbetting and not lottery or gaming. Read our full press release here: https://t.co/ZkIS24Wx2p
— iDEA Growth (@iDEA_Growth) August 16, 2019
The Poker Alliance, the new version of the Poker Players Alliance, issued no statement or even a mention of the DOJ’s appeal on its social media or website.
