Poker Alliance, AGA, Ifrah, Minton Speak on Wire Act Decision
The backlash from the recent Wire Act decision has been swift and harsh. It has come from states’ rights activists and internet rights groups, gambling lobbies and state legislators, all incensed by the Department of Justice’s Office of Legal Counsel’s memo released this month.
The opinion was written in early November but held through the holidays for unknown reasons, only to be published in January and officially reverse the 2011 DOJ decision that relegated the antiquated Wire Act to sports betting only. The 2011 opinion allowed states to offer online lottery ticket sales, online poker, and internet casino games. But the new memo took most of that away in a decision that was so bewildering that US Deputy Attorney General Rod Rosenstein even put a 90-day hold on it and requested a review by the Criminal Division’s Organized Crime and Gang Section.
Meanwhile, official statements have appeared from key groups and online gambling rights advocates.
Poker Alliance: “On Shaking Legal Ground”
The response from the Poker Alliance was almost immediate. President Mark Brenner sent emails to registered Poker Alliance emails and then posted the message on the group’s website.
What exactly did the DOJ just say about internet gambling?https://t.co/i7v4AyhwGL
— Poker Alliance (@ppapoker) January 17, 2019
“The new interpretation,” Brenner wrote, “is far reaching, and I believe it stands on shaking legal ground.”
He went on to say that the decision “creates confusion for states who are seeking to legalize any form of online gaming, including iPoker, iLottery, daily fantasy sports and sports betting. Moreover, the vagueness of the OLC opinion could have far-reaching implications for the gaming industry (beyond traditional internet wagers) if it is applied aggressively.”
Brenner feels that the core is how the DOJ will “treat the intermediate routing of internet gambling data that crosses over (incidentally) from a state where this form of gaming is legal into a state where it is not.” He notes that the opinion will likely force scrutiny on interstate online poker liquidity. Thus, poker may take the brunt of the hit if the new DOJ opinion stands.
The American Gaming Association has not traditionally been a fan of online gambling, having only recently welcomed online gambling-focused companies like PokerStars’ parent The Stars Group and PartyPoker’s parent GVC Holdings with board-level memberships. That move happened in 2018 but didn’t change the AGA’s overall opinion of online gambling.
That was evident in the AGA’s days-late statement about the Wire Act decision. The words of Sara Slane, AGA Senior Vice President of Public Affairs, was as tepid as most in the online gaming industry expected.
AGA Statement on DOJ Reinterpretation of the Wire Act https://t.co/t7tgo2nDyB
— American Gaming Association (@AmericanGaming) January 18, 2019
Slane called the DOJ decision “unfortunate” in departing from “well-established practice…without a compelling reason to do so.”
She went on to say that the new opinion from the Office of Legal Counsel “does not impact the ability for states and tribes to legalize and regulate gaming on a state-by-state and tribal basis, or for companies to provide the exciting products and entertainment experiences our customers want.” Even further, Slane went on to encourage the DOJ to investigate and “shut down illegal, unregulated gambling operators who prey on customers.”
From an organization that hardly ever mentions online gambling and seemed coerced into making this statement, it shouldn’t be surprising that the AGA wasn’t bothered by the latest Wire Act developments.
Ifrah Law: “Change in Interpretation”
One of Attorney Jeff Ifrah’s many specialties is gambling law. His take on important gambling decisions via his Ifrah Law blog is critical in gaining perspective, especially when that take uses his past experiences in and knowledge of business crimes, fraud and compliance, and litigating against the federal government.
Concern about the legality of sports betting and online gaming may be premature. Read @jifrah's take on the recent DOJ Opinion to expand the Wire Act. https://t.co/ZZVfUXftB7 pic.twitter.com/CToJFY0GB2
— Ifrah Law (@ifrahlaw) January 15, 2019
Ifrah immediately posted his thoughts on the Wire Act decision, knowing that enforcement directions will give more perspective in the future. But his primary thought was that the DOJ opinion will push the issue toward the courts. He noted that the opinion contradicted itself and “decisions by at least two district courts and dicta by the US Supreme Court by maintaining that the Wire Act prohibits all interstate wagering activity.”
“The opinion glosses over case law precedent and largely ignores the legislative history that accompanied the Wire Act,” he wrote.
Ifrah seems confident that the DOJ won’t seek to prosecute online gaming. He called the new opinion “merely a change in interpretation” that still has no enforcement policy attached to it.
Further, he stresses that the courts will likely take up the issue at some point to decide the Wire Act’s finer points. In addition, Ifrah believes that Congress should be pushed to amend the Wire Act to “properly address the technological landscape of the modern age.”
Minton of CEI: “Twisting the Laws”
Writing for the Competitive Enterprise Institute, online gambling advocate Michelle Minton did not mince words when channeling her anger about the Wire Act decision into a comprehensive article about it. Even the title – “Department of Justice Disregards Intent of Congress on Internet Gambling – leaves little room for misinterpreting her opinion.
Her interpretation of the original Wire Act, per its passage and coordinated Senate hearings, applies the law squarely and only on sports betting when it violated state laws. And her reading of the new OLC opinion is that the Wire Act was intended to prohibit all interstate gambling online.
Minton calls the new opinion “mind-boggling” and the OLC’s new conclusion reached by way of “pretzel-logic.” She writes, “At once, it argues that it is inappropriate to rely on the stated intent of the 87th Congress to interpret the Act as limited to sports betting while, at the same time, the new memo uses grammatical analysis to support the claim that Congress intended to create a sweeping prohibition on all gambling wire communications.”
Using historical and legal precedent, Minton asserts that the OLC opinion ignored it all, as well as the true Congressional intent. As a result, she anticipates that many states will avoid online gambling and wait for more clarity from the DOJ or Congress, while banks and other financial institutions will begin backing away from online gambling transactions in all states.
Essentially, “the philosophy under which OLC appears to now be operating is one which makes it perfectly acceptable to ‘reinterpret’ the statutes that were democratically enacted by elected and accountable lawmakers in order to twist the laws into compliance with the world view of a few unelected officials.”
A scathing review of the DOJ Wire Act memo by Michelle Minton that is definitely worth the read: https://t.co/T02JY7KSeB
— Poker Alliance (@ppapoker) January 17, 2019