capitol washington dc

U.S. Reps Introduce Appropriations Amendment to Defund Wire Act Enforcement

The United States Department of Justice recently pushed back its enforcement date for its new interpretation of the Wire Act all the way until the end of the year, but rather than wait for the calendar to turn and then see what happens, a few members of the U.S. House of Representatives decided to try a pre-emptive strike on said enforcement. First noticed by Online Poker Report, Rep. Hank Johnson (D-GA), Rep. Sanford Bishop (D-GA), and Rep. Andy Barr (R-KY) filed an amendment to an appropriations bill to cut off funding for the enforcement of the Wire Act. Unfortunately, that amendment was later withdrawn.

It Was Worth a Shot

An appropriations bill authorizes government spending and is an important part of Congress’ duties. This bill includes funding for the Department of Justice, which is why the three Representatives included the Wire Act amendment. It was an extremely short amendment, reading simply:

None of the funds made available by this Act may be used to enforce the Department of Justice Office of Legal Counsel memorandum entitled ‘Reconsidering Whether the Wire Act Applies to Non-Sports Gambling’ (issued on November 2, 2018).

Thus, if Bishop, Barr, and Johnson got their way, the Department of Justice would have had to enforce the new Wire Act opinion with no money or get the money from somewhere else. As mentioned, though, the amendment was withdrawn – reasons unknown – and no vote was taken on the matter.

As readers of this site no doubt know by now, the Department of Justice’s Office of Legal Counsel (OLC) issued an opinion in late 2011, stating that the Wire Act only applies to sports betting. As such, doors opened for states to legalize and regulate online gambling. In November 2018, though, the OLC – now under the Trump Administration – inexplicably issued a new opinion, this time saying that all interstate online gambling was illegal.

The Wire Act was reexamined in 2011 at the request of the Illinois and New York lottery commissions, who wanted to know if it was okay to sell lottery tickets online. This time, though, there was no reason to look at it again. No reason, except that Sheldon Adelson wanted it done. The Wall Street Journal reported not long after the new opinion was published (it was published in January 2019) that Sheldon Adelson’s lobbyists had contacted the Department of Justice, handing over their own analysis of the Wire Act. Adelson has said he will do whatever it takes to get online gambling banned in the United States and waving his billions around the Trump administration is his latest attempt.

The Department of Justice gave states and gaming operators a couple months to comply with the Wire Act, later bumping that to mid-June. In the meantime, the New Hampshire Lottery Commission sued and recently won, causing the Department of Justice to back off at least for now, delaying the enforcement date until 2020. The delay is likely so that preparations can be made for an appeal, but at least it’s something.

Georgia on Their Minds

That the proposed amendment came from two Georgia representatives is no coincidence. In May, Georgia Governor Brian Kemp and Attorney General Chris Carr wrote a letter to the Department of Justice, urging it to reconsider the new Wire Act interpretation.

Kemp is a massive supporter of Donald Trump and the current administration, so the fact that he actually had a problem with something the administration did must mean the Wire Act is as serious problem for Georgia. As it turns out, it could be. Georgia sells lottery products online – both jackpot lottery tickets such as Mega Millions and Powerball and “Diggi games,” which are like online scratch-off tickets.

The OLC opinion that says interstate online gambling is illegal restricts basically any communications transmission. That means any sort of communications that cross state lines, even if they begin and end in the same state, are not allowed. This could completely screw lotteries, as their payment processing could route out of state and the largest lotteries – Mega Millions and Powerball – are multi-state.

If the Wire Act makes internet lottery sales or even traditional multi-state lotteries illegal, it “would devastate the benefits provided to citizens in Georgia and across the nation through state lotteries,” wrote Kemp and Carr in the letter to the Department of Justice.

Proceeds from the Georgia lottery go to funding public pre-K programs and the HOPE Scholarship, which provides merit-based tuition assistance for Georgia residents attending in-state schools. The HOPE Scholarship has been so immensely popular that it is running out of funds, so restrictions on lottery sales would not be good.

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