Wire Act Lawsuit Ruling on Online Poker Expected Soon
The executive director of the New Hampshire Lottery Commission (NHLC) expects a decision on its Wire Act lawsuit. The case challenges the Department of Justice’s 2019 US online poker ban, which bans multi-state online gambling. Arguments in the case begin in the court of Judge Paul J. Barbadoro on April 11.
Charles McIntyre, the NHLC executive director, spoke to Online Poker Report on the Wire Act lawsuit. McIntyre described Judge Barbadoro as a deliberate jurist, but one who should process the case in a matter of weeks.
McIntyre said of Barbadoro, “He’s a very deliberate, considerate judge, so I think he’ll take at least 30 to 40 days to make a decision.”
Because the case involves a 1961 law, any new assessment must take into account technological changes over time. The NHLC director said, “In a statutory issue, there’s a lot of things to look at. We’re talking about a law passed pre-internet. Most laws have been updated to reflect technology, and this one obviously hasn’t.”
New Hampshire Filed Federal Lawsuit
The New Hampshire Lottery loses money each day the case continues, so McIntyre expects the judge to keep that fact in mind. The NHLC filed the case in the 1st U.S. District, widely known to be a good judicial district for such cases.
On March 10, the attorney generals of New Jersey and Pennsylvania signed on to Wire Act lawsuit. Pennsylvania and New Jersey filed to protect their legal online poker and casino industries. New Hampshire filed to protect its online lottery ticket sales.
When New Jersey signed on to the Wire Act lawsuit to protect its online poker and casino industries, the New Jersey DOJ wrote, “This Court can and should grant relief that reaches beyond the parties and the District of New Hampshire, and that protects the interests of third-parties like New Jersey nationwide.”
“Under the Declaratory Judgment Act, the Court should declare that the Wire Act does not cover non-sports-related gambling in any jurisdiction.”
New Jersey AG Gurbir Grewal’s letter added, “Under the Administrative Procedure Act, the Court should vacate the DOJ’s 2018 reinterpretation of the Wire Act as null and void.”
Threat to US Online Poker
The lawsuit is in response to an opinion made public in January. Back in January, the US Department of Justice’s Office of Legal Counsel (OLC) announced it had changed its opinion on the legality of interestate online poker and online casinos. In 2011, the OLC declared online poker and casino betting to be legal under the 1961 Federal Wire Act.
That decision led to Nevada legalizing online poker in a statewide election in 2012, which in turn led to the launch of online poker in 2013. Delaware and New Jersey each held statewide votes in 2012. Both states passed online poker and casino sites. Each rolled out interactive gaming in late 2013.
Pennsylvania added online gambling in 2017, while West Virginia recently became the 5th state to regulate online poker. Along the way, Nevada, Delware, and New Jersey signed the Multi-State Internet Gambling Association (MSIGA) to share poker player liquidity.
Restore America’s Wire Act
In reaction to the legalization of online poker, Las Vegas Sands Corp. founder Sheldon Adelson launched a public policy campaign to ban online gambling in all 50 US states. When he announced the Coalition to Stop Internet Gambling (CSIG) in early 2014, Adelson said he would spend “whatever it takes” to ban iPoker and online casinos in the United States.
With the largest political donor in the country launching an anti-online gambling campaign, a handful of lawmakers on Capitol Hill were certain to take up the issue. US Senator Lindsey Graham (R-South Carolina) and former US Rep. Jason Chaffetz (R-Utah) introduced Restore America’s Wire Act (RAWA) to their respective houses of Congress.
Who Supported RAWA?
Several others supported the measure over the next few years. In the Senate, supporters included Sen. Tom Cotton (R-Arkansas), Senate Minority Leader Charles Schumer (D-New York), Sen. Orrin Hatch (R-Utah), Sen. Dianne Feinstein (D-California), and Sen. Marco Rubio (R-Florida). In the House, former Rep. Charlie Sykes (R-Pennsylvania) supported the bill.
RAWA di not gather enough support, though. Online poker is not a popular cause on Capitol Hill, because libertarians and conservatives widely opposed the bill. Sen. Rand Paul (R-Kentucky), former Rep. Ron Paul (R-Texas), and influential tax lobbyist Grover Norquist each loudly denounced RAWA. Above all, they called it a vast expansion of federal authority over state’s rights.
Respresentatives of the Professional Pokers Alliance (PPA) appeared at legislative hearings at the federal and state levels. PPA members and other advocates gave better arguments, because they were based on facts and not fear. Therefore, anti-online gambling measures were roundly defeated by the end of 2016. That did not stop Sheldon Adelson or CSIG.
DOJ Changes Wire Act Opinion
By that time, Sheldson Adelson’s lobbyists had taken their cause directly to the U.S. Department of Justice. The GOP-led Justice Department was more likely to support his causes, because he is a big Republican donor. Though it took nearly 2 years, the lobbying effort worked.
On November 2, 2018, the Office of Legal Counsel sent a sealed memorandum to US Attorney General Jeff Sessions. The memo contained the DOJ’s Wire Act opinion. On January 14, the US Justice Department unsealed the memo and announced a new interpretation of the Wire Act. Online poker sites and casinos had until April 15 to assure their gaming did not cross state lines.
Later, the DOJ changed the deadline to June 14, 2019. All licensed online poker operators must comply by that date or face federal sanctions. That is, unless the New Hampshire Lottery’s Wire Act lawsuit wins in Judge Paul Barbadoro’s court.