The idea that the Wire Act will ever be expanded to cover interstate lottery, mobile casino, or [online poker] is dead and buried. Last week, IGT won the lawsuit it filed against the Department of Justice (DOJ) nearly one year ago and the victory has significant implications for online poker.
The ruling in the US District Court for the District of Rhode Island means that the Wire Act applies only to sports betting — not online casino gaming or real money online poker in the US.
The company sued the Biden DOJ last November. IGT argued that uncertainty created by two unique interpretations of the federal Wire Act- made under the Obama and Trump administrations- put the company at risk of prosecution.
Last Thursday, District Court Judge William Smith agreed.
“The Court holds that the threat of prosecution faced by IGT, both for its lottery and non-lottery businesses, is credible enough to meet the requirements of proving an injury-in-fact,” Smith wrote in a 24-page ruling.
Why Did IGT Sue?
IGT is the largest provider of iGaming and lottery services in the US. As such, it needed to conduct its business without the threat of prosecution by the DOJ.
But that was proving impossible to do after the Trump DOJ’s Office of Legal Counsel (OLC) issued an opinion in 2018 that the Wire Act applied to sports betting and online casino gaming and poker.
As with many policies enacted during the Trump years, the government’s position on the Wire Act was a total reversal of the one held by the previous administration. In 2011, the Obama DOJ’s OLC issued an opinion that the Wire Act only applied to sports betting.
Another lottery entity, the New Hampshire Lottery Commission (NHLC), took the Trump DOJ to court over the matter and won. The First Circuit Court of Appeals ruled in favor of the NHLC on January 20, 2021 — the day Biden took office.
After the Biden DOJ declined to appeal, many thought the issue was done for good. Unfortunately, the chance that a future administration could say the appellate court erred and announce that it would resume prosecuting operators was too much for IGT — hence the company’s lawsuit.
What Does This Mean for Online Poker?
It is unlikely that the DOJ will take such criminal action against other parties under the Wire Act for state-authorized non-sports-related gambling, given the case precedent. Smith’s ruling should be the end of the matter — online poker operators in the US should be able to continue building their businesses.
“The idea that the Wire Act will ever be expanded to cover interstate lottery, mobile casino or [online poker] is dead and buried,” Jeff Ifrah of Ifrah Law PLLC told US Gaming Review on Friday.
Other gaming law attorneys took a more cautious tack.
“While IGT appears to have been given its ‘safe harbor’ to continue lottery operations in the First Circuit — and perhaps other poker and live casino game operators may see this as encouraging news for their internet wagering plans — the gaming industry should still move forward cautiously,” said Jeffrey Silver.
That’s because the ruling technically only applies to IGT, but Smith granted IGT’s motion for summary judgment and said his ruling applies to any US jurisdiction in which IGT operates.
What Happens Now?
However, the issue isn’t entirely settled.
Gregory Gemignani, an attorney with Dickinson Wright PLLC, said IGT is likely safe from prosecution. Other operators are likely safe, too — at least through 2024, with Biden in the White House.
But if the GOP wins in 2024, all bets are off.
“The Biden DOJ has never had any particular appetite for enforcing or advancing the opinion that came out in the Trump years,” Gemignani said. “But this ruling wouldn’t necessarily prevent [a future DOJ] from using the Wire Act against somebody else.
“If they did that, they would scare the hell out of the market.”
The DOJ could appeal, but Anthony Cabot — Distinguished Fellow in Gaming Law at the Boyd School of Law, University of Nevada-Las Vegas (UNLV) — said he thinks that probably won’t happen.
“It is unlikely that the DOJ will take such criminal action against other parties under the Wire Act for state-authorized non-sports-related gambling, given the case precedent,” Cabot said.
Saiber LLC’s Jeremy Kleiman said he saw two possible scenarios where the ruling in Rhode Island district court could wind up not being the last word on the issue:
- Congress could amend the Wire Act
- An appellate court in another circuit could issue a ruling incompatible with other circuits. If that were to happen, the US Supreme Court would have to decide the matter.
“If Congress cared about solving policy issues instead of partisan politics, there is much to fix in the Wire Act, given the rapid proliferation of sports wagering,” Cabot said.
Another option, according to Gemignani, would be for the Biden DOJ to disavow the OLC opinion from the Trump DOJ. Attorneys general from 25 states and the District of Columbia urged the White House to do just that in a letter to Biden in June 2021.
The Rhode Island District Court case is IGT et al. v. Garland et al. (No. 1:21-cv-00463).
Learn more about the Wire Act and Multi-State Online Poker in our new guide!