The New Hampshire Lottery Commission won its lawsuit against the Department of Justice last week. US District Court Judge Paul Barbadoro set aside the DOJ’s new opinion that the Wire Act applies to all forms of online gambling.
However, the DOJ has the chance to walk away winners as well. It just needs to take advantage of the opportunity Judge Barbadoro is giving it to back off.
The DOJ’s Office of Legal Counsel issued an opinion in December 2011 that the Wire Act only applies to sports betting. That’s what led states like New Hampshire to legalize online lottery sales.
Delaware, New Jersey, and Nevada took it a step further. These states legalized things like online poker and online casino games inside state lines.
In the DOJ’s cross-hairs
Seven years down this road, with more states coming on board, namely Pennsylvania, the DOJ suddenly changed its mind. Its new opinion is that the Wire Act applies to all forms of online gambling. At least those that cross state lines.
Most online gambling operators pass at least some data back and forth between servers across state lines. So, it seems the entire legal online gambling industry is now in the DOJ’s cross-hairs.
So far, the DOJ has paid little attention to the fact that relying on a law to govern online gambling that was written long before the Internet existed is like skating on thin ice. Now, it has given these otherwise legal US online gambling operators until June 14 to comply with the opinion.
Growing Wire Act opinion opposition
Opposition to the opinion from state governments and industry stakeholders has been mounting from the start. Various government agencies have filed suit and the list of those lining up against it continues to grow.
At the beginning of this year, both The Wall Street Journal and The Washington Post ran stories suggesting Las Vegas Sands Corporation CEO Sheldon Adelson may actually be behind the opinion.
Adelson is an anti-online gambling zealot who has lobbied hard to have the 2011 DOJ opinion reversed. Both articles suggested the opinion came from a memo sent to the DOJ by an Adelson-backed lobbyist in 2017. The lobbyist, Washington attorney Charles Cooper, confirmed as much.
The DOJ issued a standard denial, saying any accusation the opinion was shaped by outside interests is “baseless and offensive.”
A fine mess
However, it clearly did not anticipate how much of a mess the opinion would create.
Now, Judge Barbadoro has declared once again that the Wire Act applies only to sports betting. A decision that gives the DOJ the chance to leave this mess behind it.
It may still continue with its enforcement deadline. It may even appeal Judge Barbadoro’s decision. The DOJ could very well stand by this new opinion all the way to the Supreme Court.
Or, it could simply walk away now.
Walking away from the Wire Act
No more ugly truths about the origins of the opinion will be revealed if it takes that route. Opposition to the opinion will disappear with it. The integrity of the DOJ’s Office of Legal Counsel will no longer be in question.
At this point, that would have to be considered a win. Or at least less of a loss than what lies ahead for the DOJ if it continues to stand behind an opinion few, if any, share.
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