Them’s fightin’ words!
An arm of the federal government reversed an 8-year-old legal opinion that certain states always figured gave them the go-ahead to launch online gambling. It certainly sounds like the feds are picking a fight. But are they?
This week the Department of Justice’s Office of Legal Counsel issued a replacement for its 2011 opinion which said the Wire Act only applies to sports betting. Its new opinion is that the act applies to any form of gambling that crosses state lines.
Of course, the Wire Act was written in the 1960s, before there even was an Internet.
However, this new opinion could mean otherwise legal US online gambling runs afoul of the law. Or at least legalized intrastate online gambling that uses technology to route data out of state does. Or, interstate online gambling, like the handful of poker sites that share player pools in now three states, might, too.
The American Gaming Association, for its part, seems to think little will be affected:
“It is unfortunate that the Department of Justice departed from well-established practice in reversing its previous opinion without a compelling reason to do so. However, the 2018 OLC opinion does not impact the ability for states and Tribes to legalize and regulate gaming on a state-by-state and tribal basis, or for companies to provide the exciting products and entertainment experiences our customers want.
On the surface, it’s an opinion that sounds like it should put states that have legalized online gambling on notice. It also seems like it says the battle for a state’s right to make its decision on online gambling is now on. But is it?
It is not the sound of victory, it is not the sound of defeat
Nevada Congresswoman Dina Titus believes the fight is coming. Rep. Titus issued a statement denouncing the reversal almost immediately after hearing the news. It reads:
“Though the full impact of this reckless DOJ reversal remains to be seen, we can be certain that it will inject uncertainty into a well-regulated market and push consumers back into the black market. Unfortunately, the Trump Administration only supports states’ rights when it is politically convenient. Despite this setback, I will continue to lead the fight in Congress to ensure states like Nevada can decide what is best for them on the question of online gaming.”
Good for her. It sounds like Rep. Titus and others are ready to start fighting the good fight from inside Congress. However, the real battleground for this kind of conflict is inevitably the courts. For those paying attention, the states have already landed the first couple of blows there.
In fact, there are already decisions from the 5th Circuit and the 1st Circuit Courts of Appeals holding that the Wire Act applies only to sports betting.
The feds may decide to give the opinion the enforcement teeth it needs to be worth more than the paper its written on. But if it does, it’ll start the court battle down 0-2.
Fighting the losing Wire Act battle won’t win the feds the war
Of course, it remains to be seen whether this is just an opinion or an opinion the DOJ wants to enforce. Plus, it’s unclear whether the federal government wants to spend the kind of money, time and resources that major pro sports leagues did fighting a similar battle against a state’s right to legalize sports betting.
New Jersey already proved the US Supreme Court would ultimately back a state’s constitutional right to make its decisions on gambling. Do the feds want to run down the same road? And do they really want to do it armed with almost 60-year-old legislation they clearly have to stretch super thin to make relevant today?
The Trump Administration has proven it loves a good fight. However, will it really want to take on one that is so obviously a loser?
The DOJ might want to be a real Wire Act stickler here. If so, it can probably take its new interpretation of the law and force states to change some things. For example, the DOJ could force operators to improve the tech, so data isn’t routed out of state. The DOJ might even be able to force those states involved in interstate online poker to cool it for now.
For whom the bell tolls
However, if it tries to do anything more than that it’s doomed to fail. The DOJ must know this. Really, it can’t have any intention of going after US online gambling as a whole.
As a result, the battle for a state’s right to decide its fate when it comes to online gambling hasn’t been renewed. In fact, this latest Wire Act opinion looks more like something else entirely. It appears to be the Trump Administration throwing an aging casino owner and anti-online gambling zealot a bone. A thank you of sorts for all the money he’s funneled its way.
However, it means very little without real enforcement behind it.
Online gambling advocates across the country have been sounding the alarm about this all week. Please, wake us all up when the DOJ issues more than just an opinion.