The Department of Justice has issued a new memo regarding the enforcement of the revised Wire Act opinion.
In the memo, the Department confirmed that it was still trying to figure the way forward following the recent ruling on the Wire Act by a federal district judge in New Hampshire. The New Hampshire verdict rejected the 2018 Office of Legal Counsel opinion, asserting that the Wire Act applies to sports betting only. However, the judge predicted that the losing party was likely to file for an appeal, and this seems to be the next course of action for the DOJ.
In light of the recent developments, the Department has announced that it has extended the grace period published in its February memo to December 31, 2019, or until 60 days of reaching a decision on the New Hampshire case.
The memorandum went on to caution operators that the extension of the grace period is not a warrant for violating the 2018 OLC opinion. According to the DOJ, the postponement of the enforcement merely means that state attorneys will not prosecute licensees who operate outside of the Act during this period.
This is the second time that the law enforcement body is deferring the implementation of the new regulation this year. In February, the Department had instructed all licensed operators to ensure that they comply with the rule by April 15. However, multiple litigations, including the New Hampshire lawsuit, forced the executive Department to shift the goal post to June 15.
DOJ to stick to the revised Wire Act opinion
In respect to the recent statement, it is clear that the DOJ plans to uphold the reinterpreted opinion that extends the scope of the Wire Act to other forms of wagering besides sports betting.
The regulation bans the transmission of wagering information, bets, and payments for gambling services across state borders, and the rule will apply to all gambling activities, including poker and online casino games. This means that many businesses would be found to be operating outside of the law if it was enforced in its current form.
Initially, the role extended to iLotteries, but the Department came out to clarify that state lotteries would not be considered to violate the Act in an April memo. The recent ruling in New Hampshire also exonerates state lotteries from prosecution, but the future of multi-state lottery games like Powerball and Mega Millions is uncertain.
What next for operators?
The enforcement of the Wire Act is a complicated issue, mostly because of the ambiguity of the revised opinion.
In the reinterpreted opinion, the DOJ does not explicitly state the types of gambling businesses that will be criminalized by the law. Also, the Department does not seem to have valid legal reasons to extend the scope of the Act to other gambling operations apart from sports betting.
The lawsuit by the New Hampshire Lottery was founded on the argument that the legislation was poorly-worded, and the verdict established that the lottery operators had reasons to be concerned about being prosecuted when the Wire Act is implemented. This judgment sets a precedent for more lawsuits against the DOJ as more states and operators are likely to move to court to contest the regulation.