The Continuing Evolution of the Wire Act Law
The last decade has seen significant legal gyrations surrounding the field of federal Wire Act law, with each development drawing substantial attention and scrutiny. The most recent example of this occurred in the last week, when a filing at the First Circuit Court of Appeals set off a flurry of speculation concerning potential implications for gaming businesses subject to the Wire Act.
What was the Court’s filing and what does it mean for Wire Act law?
Readers will recall from our previous blogs the complex and lengthy legal analysis associated with interpreting the Wire Act. The quest to understand the boundaries of the statute has now stretched into a third presidential administration, dating back to the United States Department of Justice’s (“DOJ”) 2011 Opinion letter which interpreted the Wire Act as being limited exclusively to sports gambling. Subsequently, the Trump Administration DOJ reversed this earlier guidance in a 2018 Opinion letter. This DOJ Opinion seemingly broadened the federal interpretation of the Wire Act, extending it to other forms of interstate gaming. With all varieties of online and Internet gaming thus thrown into a state of flux, legal challenges to the 2018 DOJ Opinion ensued, led by the New Hampshire Lottery (which was concerned about prosecution related to its interstate transmission of wagering information). A federal district court judge sided with New Hampshire and set aside the 2018 DOJ Opinion letter in its entirety. On appeal, the United States Court of Appeals for the First Circuit affirmed the district court ruling. In recent months, the question of where this case may end up has been shrouded in mystery given that there is a new presidential administration in office.
With a recent filing, the Court of Appeals has started the clock for newly-confirmed Attorney General Merrick Garland to either accept the courts’ rulings against the DOJ or petition the United States Supreme Court for review of the district court’s decision. That deadline is now May 15, 2021 – although the DOJ may provide clarity on how it will proceed, or not proceed, before then. Given the impact that the DOJ’s chosen path may have for daily fantasy sports, online poker, and iLotteries, among other online contests, the entire gaming industry will be intently following this matter for any clues between now and then.
Notwithstanding the recent favorable rulings for the industry, the regulatory landscape for interstate gaming remains in a state of flux. While conventional wisdom suggests that current DOJ leadership is unlikely to appeal the First Circuit’s ruling, the wild swings which have characterized Wire Act law developments over the last decade may prove such a bet fraught with risk. Nevertheless, it looks as if clarity could soon come for an industry that has been seeking it for years. In the interim, it is critical that gaming businesses work closely with knowledgeable gaming attorneys to ensure compliance with applicable state and federal laws.
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