DOJ Directs Wire Act Effective for Sports Betting Only to 2020
The Department of Justice isn’t exactly acknowledging defeat, but its latest move does face the reality that it cannot legally enforce its 2018 Office of Legal Counsel opinion regarding the Wire Act at this time.
In a memo dated June 12, 2019, US Deputy Attorney General Jeffrey Rosen instructed all US attorneys to hold off on implementing the Wire Act opinion until the end of the calendar year. The last date given had been June 14, 2019, but the decision by the US District Court last week makes any enforcement of that Wire Act opinion illegal as it pertains to any forms of gambling other than sports betting.
The DOJ still has the option to appeal the District Court decision and may do so in the coming weeks, but until that happens, US District Court Judge Paul Barbadoro’s ruling that the 2018 Wire Act opinion is set aside is the law of the land.
The Office of Legal Counsel opinion about the Wire Act is referred to as the 2018 opinion, but the general public did not become aware of it – officially – until January 2019.
Almost immediately, state attorneys general began across America began to explore legal action to stop it from being enforced. They had long relied on the 2011 DOJ opinion, the one that explicitly relegated the Wire Act applicable to sports betting only. States took that interpretation and ran with it, legalizing online lottery ticket sales, online poker, and internet casino games.
Anticipating the backlash, then-US Deputy Attorney General Rod Rosenstein imposed a 90-day “grace period” on the opinion’s implantation.
In the weeks that ensued, the New Hampshire Lottery Commission filed its lawsuit in the US District Court, challenging the DOJ and its Wire Act-related decision. And as Judge Barbadoro began to take the case under advisement, he spoke to a DOJ attorney to request an extended deadline. He wanted time to consider and rule on the case before any actions could be taken by the DOJ.
Rosenstein complied. He added another 60 days to the delay, setting an enforcement date for the DOJ’s OLC opinion for June 14.
Meanwhile, from mid-March to the beginning of June, Rosenstein retired/resigned from his position and Rosen was appointed to take his place.
When Barbadoro revealed his ruling on June 3, Rosen had to make a decision: Appeal the ruling immediately or issue another delay. He chose the latter.
BREAKING: DOJ holding off on enforcing the Wire Act beyond sports betting until 2020 or until the end of federal court case. See the memo here: https://t.co/H6vz3TGild
— Dustin Gouker (@DustinGouker) June 12, 2019
Latest DOJ Memo
On June 12, the DOJ’s Office of Public Affairs issued a memo to all US attorneys, assistant attorneys general and the Federal Bureau of Investigations (FBI) to adhere to two directives:
–Federal prosecutors should not apply the Wire Act to non-sports-related betting or wagering through the end of the calendar year per the new extended grace period.
–Any Wire Act charges must be reviewed and approved by the Criminal Division’s Organized Crime and Gang Section to ensure continuity across the country.
Deputy AG Rosen’s memo was entitled “Updated Directive Regarding Applicability of the Wire Act, 18 U.S.C. § 1084, to Non-Sports Gambling.”
The memo cited the two extensions already in place and the US District Court ruling and then noted:
“The Department is evaluating its options in response to this opinion.”
With that, the forbearance period was extended from June 14 to December 31, 2019, or it could be 60 days after “entry of final judgment in the New Hampshire litigation, whichever is later.”
Any attorneys with questions are encouraged to contact Organized Crime and Gang Section Deputy Chief Douglas Crow for further guidance.
Awaiting the Next Move
Per the US District Court decision last week, states should feel comfortable moving forward with their state lotteries and online gaming businesses.
Even so, everyone will wait to see if the DOJ decides to appeal that decision or let it stand. It is unlikely that the DOJ will not appeal, as even Judge Barbadoro fully expected the case to head to the US Supreme Court, as noted during the oral arguments phase.
Meanwhile, other states may choose to sue the DOJ to further solidify the decision and ensure that their online lottery and gambling businesses are safe from prosecution.
Commentary: Political pressure could be forcing DOJ’s hand in the next Wire Act legal battle – 'DOJ may have a broader interest in not backing down' https://t.co/1rM61L8u4r @CDCNewswire #WireAct @OPReport @UNLVLaw pic.twitter.com/9EDvslbb5q
— Howard Stutz (@howardstutz) June 12, 2019