The Final Battle for the Soul of the Wire Act Law?

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The Final Battle for the Soul of the Wire Act Law?- Klein Moynihan Turco
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The deadline for the United States Department of Justice (“DOJ” or the “Department”) to appeal the First Circuit decision vacating a 2018 Wire Act Law opinion has passed without action from DOJ attorneys.  While this effectively ends the years long lawsuit, a new front in the fight has emerged in its wake.  Last week, the Attorneys General of 26 states (the “AGs”) submitted a letter to top DOJ leadership requesting further clarity on the DOJ’s Wire Act law interpretation.

What are the AGs concerns about the DOJ’s current Wire Act law position?

Readers will recall our chronicling the whipsawing interpretations of the Wire Act law by the DOJ over the last decade.  The most controversial iteration of that saw DOJ publicize the 2018 Opinion determining that the Wire Act’s application extends to all online gambling, rather than just sports wagering.  This was challenged in the federal courts by states concerned that state-run lotteries which sold tickets over the Internet were suddenly at risk of prosecution for violation of federal law.  The United States Court of Appeals for the First Circuit ultimately ruled in favor of the states.

Concerns About Where the Wire Act Law Stands Today

In their letter, the AGs expressed their collective concerns regarding the limited reach of that favorable ruling.  The First Circuit’s decision is only binding on DOJ with respect to those entities which brought that lawsuit, namely the New Hampshire Lottery Commission.  Moreover, it is only binding precedent in Maine, New Hampshire, Massachusetts and Rhode Island, the states that comprise the First Federal Circuit.  Consequently, the AGs’ grievance is that continued silence from the DOJ as to its Wire Act interpretation creates significant uncertainty in the gaming industry and leaves states at risk of future prosecution.  Of particular concern to the AGs is that in the spring of 2019, DOJ issued a directive to federal prosecutors indicating that the Department would be reviewing whether the Wire Act applied to state actors and their vendors.  That review has been pending for more than two years without resolution.  Thus, as a means of alleviating the uncertainty, the AGs have publicly requested that DOJ rescind the 2018 Opinion and adopt the First Circuit’s Wire Act law interpretation.

The Continuing Evolution of the Wire Act Law

As demonstrated by the AGs’ joint letter, the legal climate for interstate gaming remains murky. Whereas DOJ’s acquiescence to the First Circuit’s ruling was a win for the industry, its silence as to how it will apply the Wire Act law beyond the First Circuit has created unwelcome uncertainty.  With AGs representing half of the country demanding action from DOJ, interested parties can anticipate with cautious optimism long sought-after clarity on the Wire Act law’s application. In the interim, it is critical that gaming businesses work closely with knowledgeable gaming attorneys to ensure compliance with applicable state and federal laws.

If you are interested in learning more about this topic or need to review your gaming operations, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for information purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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Photo by Chris Liverani on Unsplash

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