US District Court Wire Act Decision Good for Online Poker

Last updated on June 12th, 2019

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Last week, the United States Department of Justice lost an important case in the US District Court when Judge Paul Barbadoro ruled for the New Hampshire Lottery Commission and its online service provider, NeoPollard. The ruling overturned the DOJ’s Office of Legal Counsel opinion regarding the scope of the federal Wire Act, affirming that the law pertained only to sports betting.

It was a significant decision.

The lawsuit from the New Hampshire Lottery Commission focused on internet lottery sales, and more than a dozen other states supported the lawsuit against the DOJ. Many states legalized and launched online lotteries after the DOJ issued a decision in 2011 allowing them to do just that, and they have since built revenue-generating businesses across America based on that opinion.

In addition, the decision affects all forms of online gaming, including online poker. That 2011 DOJ decision opened the doors for states to legalize and regulate online poker and casino games. Nevada, New Jersey, and Delaware launched their initial sites accordingly, and Pennsylvania and West Virginia followed in the past several years. More states are considering the same.

Barbadoro’s decision that the Wire Act pertains only to sports betting allows all of those industries to continue functioning, generating revenue, and operating across state lines via interstate compacts.

Positivity for Online Poker and Gaming

Numerous industry experts and legal minds have weighed in on the decision in the past week. Online poker and casino games, it seems, will benefit significantly.

Marc Edelman, Professor of Law at Baruch College’s Zicklin School of Business, wrote for Forbes:

“For online poker operators, Monday’s court decision represents just about the greatest win imaginable at this state of litigation … Since poker is clearly not ‘associated with sports gambling,’ Monday’s court decision clearly supports the legality of interstate poker compacts, paving the way for online poker’s further growth on a national or semi-national basis.”

More than anything else, I expect today’s New Hampshire Wire Act opinion will pave the way for new interstate compacts for online poker. If I am an online poker operator, I am feeling very bullish.
— Marc Edelman (@MarcEdelman) June 3, 2019

Industry lawyer Stephen Schrier commented to EGR:

“The opinion by Judge Barbadoro is well reasoned and thorough. He carefully deconstructs the DOJ’s faulty opinion and supports a logical and proper interpretation of the Wire Act.”

Gaming law advisor and UNLV law professor Anthony Cabot agreed, noting that an appeal by the DOJ would be “an unfortunate waste of taxpayer money.”

Lawyer and founder of iDEA Growth Jeff Ifrah told SBC Americas:

“We are thrilled with today’s order from Judge Paul Barbadoro…that has reaffirmed that the Wire Act applies only to sports betting and not mobile gaming. This order means that states can continue to legalize online entertainment, including casino, lottery and poker. Further, the court set aside the 2018 OLC opinion from the Justice department finding its reasoning to be completely erroneous.”

Attorney Andrew Silver wrote for the Ifrah Law blog:

“The decision represents a win not just for New Hampshire and NeoPollard but for the iGaming industry as a whole… It is our hope that given the New Hampshire court’s decision and the restoration of the reasoning in the 2011 OLC opinion, additional states will observe the success of iGaming in New Jersey and pass legislation making iGaming available more broadly.”

Appeal Possibilities

Most analysts agree that the Department of Justice will appeal the District Court decision to the First Circuit Court of Appeals, but the process could take as long as one year.

Gaming lawyer and co-founder of the University of New Hampshire Law Sports Wagering & Integrity Program Daniel Wallach told Casino.org:

“The appellate process should last longer than the first term of the Trump administration.”

At the very least, today's Wire Act opinion should extend the DoJ's "temporary moratorium" on applying Section 1084(a) to state lotteries and their vendors for much longer than just 90 days. Appeals process could take at least one year, if not longer.
— Daniel Wallach (@WALLACHLEGAL) June 3, 2019

Meanwhile, the District Court ruling stands. “The 2018 OLC Opinion is set aside.” And the 2011 DOJ opinion, the one that originally opened the online lottery and gambling market in the US, remains the law of the land.