Wire Act Enforcement Delayed to June 2020
The United States Department of Justice is determined to have their way regarding the Federal Wire Act. They are already in the middle of an appeal of the June ruling against their recent Wire Act opinion. Anticipating that they will come out the victor, they have modified their enforcement date once again.
The new enforcement date is pushed back to the middle of 2020, but that is assuming that the appeal process is completed and the DOJ comes out on top. Of course, a loss could force us to sit through even more drama as a likely Supreme Court appeal is likely.
Deadline Pushed to June 30
For those that have been following the story behind the DOJ appeal of their Wire Act lawsuit loss, the DOJ set the enforcement date for their new opinion on December 31st. This was under the assumption that the appeal process would be complete. When the date was set, they also included a clause stating that the date could also be 60 days after legal proceedings have concluded.
Earlier this month, the DOJ requested an extension in filing briefs for their appeal, thus delaying proceedings and making the December 31 date unlikely. Late last week, the DOJ announced a new date of June 30th, 2020 as their new enforcement date. This means that the DOJ expects the case to be wrapped up by July.
Where Things Stand
The DOJ released a new Wire Act opinion earlier this year stating that the Federal Wire Act applies to all forms of gambling, not just sports betting. This causes online poker and online gambling providers to scramble as it put the regulated market into jeopardy.
Pennsylvania took the drastic step of delaying the launch of online gambling until all processes were verified to be intrastate. Others began looking for ways to save the present infrastructure of regulated iGaming in America.
New Hampshire filed a lawsuit against the DOJ to try and have the opinion struck down and that’s what happened. A Federal Judge ruled over the Summer that the Wire Act only applies to sports betting. Such a ruling appeared to be a victory for regulated online gambling in the US, but not so fast.
The DOJ decided to file an appeal and now the case is in the middle of appellate proceedings. If the DOJ wins their challenge, they would be free to begin enforcement of the new memo. Granted, New Hampshire can still appeal. If the DOJ loses, it is likely they will continue to push to the Supreme Court. Such a challenge could take years to decide.
What’s At Stake
A win by the DOJ would cause major ripples through the regulated online gambling market and would devastate the market in its present form. For example, the interstate online poker market between New Jersey, Delaware, and Nevada would have to be dismantled.
With the interstate market gone, online poker would likely end in Delaware. Some providers may back out of New Jersey as there are reports that online poker is only alive in the state due to the interstate market. You could also see other states like West Virginia decide to forgo online poker because of liquidity issues.
Also, states that have already legalized online gambling will have to scramble to bring their systems into compliance. This would likely force shutdowns of online gambling in all states but Pennsylvania until their systems are online.
Furthermore, we could see some smaller states abandon attempts to regulate online gambling due to the restrictions from the DOJ. A DOJ victory wouldn’t be as catastrophic as Black Friday was in the United States, but it would be a close second.