DOJ to Appeal Wire Act Loss

The US Department of Justice has confirmed its previously announced plans to appeal the early June decision by the US District Court for the District of New Hampshire that nullified the DOJ’s reversal opinion issued last year on the reach of the 1961 Wire Act. On Friday, with a statutory deadline looming, the DOJ filed its official Notice of Appeal to presiding US District Judge Paul J. Barbadoro.

The notice of appeal will soon be followed by a filing with the US First Circuit Court of Appeals, which includes New Hampshire. Given the gravity of the case, plus the fact that the matter revolves around two separate legal interpretations of the Wire Act, both authored by the DOJ, it’s a virtual certainty that the appellate court will hear the case. Circuit Judge Barbadoro himself noted in his June order nullifying the 2018 reversal opinion that he expected the matter to end up, eventually, before the US Supreme Court.

DOJThough the odds remain long that the nullified 2018 interpretation of the Wire Act, an opinion essentially purchased by online-gambling foe Sheldon Adelson and his Las Vegas Sands Corp., will ever be restored, there’s still that legal chance. One of the hidden reasons Adelson’s and the DOJ’s persistence is that any delaying tactics continue to negatively impact Adelson’s competitors, such as Caesars and MGM, that have fully embraced online gambling.

The negative impact inflicted upon Caesars can be seen in a state such as Pennsylvania, where Caesars would almost certainly like to see its brand not only rolled out, but quickly rolled into a multi-state player pooling compact that regulated US poker desperately needs. Yet that’s just one aspect. The most powerful force opposing Adelson’s and the DOJ’s preferences remains the dozens of state-operated lottery entities, who collectively generate billions in revenue each year, much of that from multistate lotto draws. State-level lottery entities lobbied for the 2011 clarification of the Wire Act that affirmed the old law applied only to interstate sports betting, and it was lottery entities again — specifically New Hampshire’s — that filed suit to block the DOJ’s more recent reversal opinion.

Despite some poker-industry moaning that players and poker-industry people should be doing more in this current legal matter, the truth is that they’re on the same side as the dozens of state lotteries… and those lotteries collectively have way more legal and legislative muscle. Proponents of online poker and other forms of casino-style online gambling can play a supporting role, but this will eventually go down as a states-v-feds battle.

Fortunately, the states remain the betting favorite.

Be that as it may, at least one online gambling industry entity has already sounded off on the DOJ’s announcement of a pending appeal. Veteran gaming attorney Jeff Ifrah, the founder of iDEA Growth, issued a statement through that entity as follows:

“The Department’s action, while hardly unexpected, is certainly unwarranted,” Ifrah. “DOJ generally files appeals of adverse district court decisions as a matter of course. We hope that, rather than engaging in a protracted, expensive and ultimately unsuccessful legal fight, the Department will take this opportunity to negotiate a settlement which will focus the Wire Act and DOJ’s enforcement resources on the right targets – the unlicensed illegal offshore Internet gambling operators who do not create jobs or tax revenue in the U.S. and do not appropriately protect consumers,” added Ifrah.

The poker world will have to wait a few months before the next steps in this appellate process occur. Until then it’s just a waiting game for several major casino entities that would like to move forward with online development plans. Instead, there will be more delays until the matter is settled. Perhaps all that Adelson and his minions will be able to accomplish — just more delaying of the inevitable.


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