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Legal online poker USA: the DOJ reverses Wire Act opinion

During the last weeks, the online poker news site OnlinePokerReport announced that there was a possibility that the Department of Justice (DOJ) might modify its opinion about the 1961 Wire Act. This week, the Office of Legal Counsel confirmed the rumors with a new interpretation of the law: the Wire Act is not limited only to sports betting.

Legal online poker USA: the DOJ reverses Wire Act opinion

What is the 1961 Wire Act?

The Interstate Wire Act of 1961 (or Federal Wire Act) is a U.S federal law which prohibits the operation of interstate betting activities within the country. This old law  (it was signed by John F. Kennedy) was issued to have the power to tax, make, and enforce its laws. Of course, the big picture has changed a lot in almost 50 years, and now 4 states have even legalized online gambling and 3 of them have shared poker liquidity (Delaware, Nevada and New Jersey).

The original text of the Wire act says:

"Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both."

What is changing with the new DOJ opinion?

In 2011, under the Barack Obama administration, the DOJ concluded that the Wire Act only applied to sports betting. And now, 7 years later and because of one missing comma in the text, the DOJ has reversed its 2011 opinion and now considers that the Wire Act applies to any form of betting, including of course online poker.

The new DOJ opinion states:

"We conclude that the prohibitions of 18 U.S.C. § 1084(a) are not uniformly limited to gambling on sporting events or contests. Only the second prohibition of the first clause of section 1084(a), which criminalizes transmitting “information assisting in the placing of bets or wagers on any sporting event or contest,” is so limited. The other prohibitions apply to non-sports-related betting or wagering that satisfy the other elements of section 1084(a). We also conclude that section 1084(a) is not modified by UIGEA. This opinion supersedes and replaces our 2011 Opinion on the subject".

The document is available here and it is signed by Steven A. Engel, Assistant Attorney General of the Office of Legal Counsel. It worth mentioning that this storm has been orchestrated by the casino billionaire Sheldon Adelson, a GOP super-donor.

What are the possible impacts?

First of all, it is important to notice that the DOJ opinion is not automatically an order to enforce the law: it must pass the Congress, the Supreme Court and all the legal statements in the USA. Trump's administration is facing tons of problems (including a government shutdown) and we don't believe that a 1961 law is among his priorities. But all this is just assumptions, right now, no one knows the impact of the decision. In our opinion, only lawyers will benefit from this scenario because tons of legal paperwork will be needed in the meantime.

Currently, Nevada, New Jersey, and Delaware share the player's pool and perhaps that model may face problems with the new DOJ interpretation. Also, the payment methods for poker rooms still operating in the USA may need to prepare for the future in case the DOJ opinion sustains.

Of course, it is very soon to conclude anything about his, and even if the DOJ opinion remains the same, it can happen that authorities don't enforce the law.

Conclusion

Although the consequences of the DOJ decision are unclear, we consider that online poker players will face no problems and even the poker rooms that still offer their services to US citizens will take this as an opportunity to evolve and attract more players, as less states will be willing to pursue gambling legalization before having 100% clear the DOJ opinion impact. Right now, we can only wait to see the effects on the US online gambling development, and maybe Pennsylvania, the latest state in approving a gambling regulation will be the one that tastes the new DOJ opinion consequences.

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Vargoso 16.01.19 96
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