Wire Act Reversal in Progress, Details Unknown

While most writers in the poker media were gearing up to pen a few articles about holiday online poker tournaments and making predictions for 2019. Which states might legalize online poker? Who will be poker’s next breakout star?

The United States government had other plans.

It seems that the Department of Justice decided to give in to the Grinch this year, not only taking gifts from under the tree (online poker in four states) but removing the chance of having a holiday next year…or the year after that. And who’s the Grinch? Casino mogul Sheldon Adelson. And yes, Senator Lindsey Graham is that little dog that doesn’t know any better and participates in the shenanigans because he walked into the trap of campaign funding set by Adelson.

But I digress.

The Department of Justice is reversing its 2011 Wire Act decision that authorized states to legalize and regulate online lotteries, poker, and casino games.

Credible Sources

Online Poker Report has its ears to the ground at all times and reported today that the Justice Department is writing an opinion to reverse the 2011 decision from the Office of Legal Counsel regarding the Wire Act.

The opinion “will likely say that the Wire Act applies to all forms of online gambling and not just sports betting.” Online Poker Report’s Dustin Gouker also concluded that the opinion could be published this week, which would reduce public reaction to it due to its timing just before the Christmas holiday.

There is no guarantee that the new decision will be finalized, however.

Also, and I've noted this in the story, but there is also a chance this opinion isn't ultimately issued. I can say that the opinion is/has been prepared. Whether it drops this week — or ever — we do not know for sure.

— Dustin Gouker (@DustinGouker) December 19, 2018

Possible Ramifications

Currently, Nevada offers online poker. Delaware and New Jersey offer online poker and casino games, and Pennsylvania is preparing to launch the same in early 2019. Other states are in the process of considering legislation to legalize and regulate online poker and casino games, specifically Michigan and Illinois, the former of which is considering doing so this week.

Also, what, if anything, happens to the American Gaming Association as we know it? In a world in which an OLC reversal happens, Las Vegas Sands wins, of course, but other member companies lose. Bigly, arguably.

— Chris Krafcik (@CKrafcik) December 19, 2018

Further, there are numerous states that put lottery ticket sales online after the 2011 decision, all of which would be affected by a DOJ change as well.

So if the entirety of the DOJ 2011 opinion is reversed, then online lottery products will be impacted.

— Jennifer Roberts (@JRoVegas) December 19, 2018

Some experts say that the DOJ decision is not binding law, and states with more than a passing interest in this matter could fight it in the courts, requiring Congress to pass a law instead of relying on the DOJ’s Office of Legal Counsel. States might have to spend time in the court system to continue to offer their online services, any stoppage of which would immediately and negatively affect New Jersey’s gambling revenue bottom line.

Speaking of New Jersey, US Bets spoke to recently-retired State Senator Raymond Lesniak about the news, as he was one of the most outspoken and important lawmakers supporting pro-online gambling legislation during his time in the New Jersey Senate. He did not mince words. “I would expect that the New Jersey delegation, which is very powerful, would stand up to protect New Jersey’s interest.” He then added, “Internet gaming was responsible or keeping the lights on in some casinos, and sports betting over the internet is the greatest revenue producer for our casinos, as well as the state of New Jersey. Meddling around with that would cause us grave concern.”

Couple of thoughts re: potential OLC reversal: It could spook card-issuing banks into declining legal online gambling transactions. Card-based transactions currently account for about 15% of NJ online casino / sports mix, per our tracking, so neg. impact likely at GGR level.

— Chris Krafcik (@CKrafcik) December 19, 2018

Bah Humbug

The push for the Department of Justice to reverse its 2011 decision is not a huge surprise. Some members of Congress, most with deep ties to Adelson, have been working on variations of the Restoration of America’s Wire Act for several years.

One of Adelson’s most vocal mouthpieces has been US Senator Lindsey Graham, who just recently admitted that the Wire Act and his hope to overturn the 2011 opinion is one of the most important issues with relation to speaking with US Attorney General nominee William Barr.

Graham may get his Christmas wish even sooner than he hoped, without having to wait for Barr to be confirmed. His pressure on the DOJ for several years may have paid off.

With so many important issues for Congress, @LindseyGrahamSC is quite concerned with the 2011 DOJ decision about the 1961 Wire Act. Maybe Adelson is getting impatient with Graham's inability to ban online poker and gaming? https://t.co/ELhzqsonAH #priorities

— LegalUSPokerSites (@legal_poker) December 14, 2018