WIRE ACT Case Concluded: Justice Department Loss Official

We've seen an important step in the ongoing New Hampshire Wire Act case saga. On March 15, 2021, the First Circuit Court of Appeals issued a mandate closing the case, meaning that the Department of Justice's loss regarding its Wire Act opinion is now official.

The First Circuit Court of Appeals thus declares that the Wire Act only applies to sports betting. Other forms of wagering, like online poker sites and internet casinos, are not prohibited by the Wire Act.

Background

The source of the current controversy came in January 2019 when the Department of Justice altered its longstanding guidance on the Federal Wire Act, which had been that the Wire Act applied only to sports betting. Under the government's new Wire Act interpretation, it believed that all forms of gambling that crossed state lines, not just wagering on sports events, were covered by the Wire Act.

This meant that forms of poker involving participants located in different states were supposedly illegal. This didn't affect offshore poker rooms, which are beyond the reach of the F.B.I. and other federal agencies anyway. But state-regulated internet poker sites were prohibited from transacting across state borders. The existing interstate compact between New Jersey, Nevada, and Delaware to combine their online poker player pools thus would have become against the law.

New Hampshire Acts

Interactive poker wasn't the only industry impacted by the DoJ's antics. Various lottery organizations were also negatively affected. Not only are there multi-state lottery drawings, like Powerball, but many lottery companies have begun selling tickets online both to their own residents and citizens of other states. Thus, any legal opinion that such interstate gambling was illegal could be disastrous for lotteries.

With that in mind, the New Hampshire Lottery, in conjunction with its tech partner Neopollard, filed suit against the Department of Justice in February 2019.

New Hampshire leaders argued that the wording of the Wire Act clearly meant to prohibit sports betting that involved more than one state while not saying anything about other forms of wagering. The Department of Justice held the contrary viewpoint. Officials in other gambling-friendly states, like Pennsylvania and New Jersey, stated their support for New Hampshire's position.

The initial decision, by U.S. District Court Judge Paul Barbadoro on June 3, 2019, was in favor of New Hampshire and against the Department of Justice. However, the DoJ appealed.

The appeal took quite a while to be heard with various extensions and other legal maneuvers taking up a lot of time. Finally, on Jan. 20, 2021, the U.S. First Circuit Court of Appeals issued its verdict. It upheld the decision by Judge Barbadoro, denying the Justice Department's attempt to have it overturned.

Appeal Possible But Unlikely

The March 15 court mandate closes the case at the level of the First Circuit Court of Appeals. This means that the judgment is final, and there can't be any petitions for rehearing or other motions filed with this court.

There is still the theoretical possibility that the government might appeal again, this time to the U.S. Supreme Court. They now have 90 days to file any such appeal.

However, this appears unlikely both because of a change in presidential administration as well as the recent passing of big-money political donor Sheldon Adelson: widely believed to have been the driving force behind the DoJ's about-face on the Wire Act in the first place.

Casino Mogul Sheldon Adelson Was Allegedly Behind the DoJ's New Wire Act Opinion

What This Decision Means for Poker

The decision is a major win for state-regulated online poker providers. They now have the ability to engage in cross-border agreements with each other. As previously mentioned, Delaware, New Jersey, and Nevada already participate in such a compact. However, this is small potatoes compared to what might eventually come to pass.

The Three States That Have Signed the Multi-State Online Gaming Agreement

There are two states that currently have licensed internet poker but have not yet joined any interstate agreement to pool player liquidity. They are Michigan and Pennsylvania. It's likely that they were being held back by the legal uncertainty surrounding such agreements. Now that the Department of Justice has lost its case on appeal, these states may feel more confident in joining such an arrangement.

The three states that have already signed the compact have a combined population of almost 13 million. Pennsylvania has almost this many residents by itself, and Michigan adds another 10 million. It's clear that either of them entering the combined licensed U.S.A. online poker economy would almost double its size. And if both of them elect to join, then this effect would be hugely magnified.

The total population of individuals able to access the same poker platforms plays an important role in generating traffic. This is particularly the case in big tournaments where there can be sizable prize pools up for grabs. These big, guaranteed prize pools can only be maintained in proportion to the number of people who enter each contest, though, and so keeping the separate state markets ring-fenced means that the prizes up for grabs must remain modest.

Online Poker Available Today

There's no need to wait for your state to regulate internet poker within its borders or to join with other states to provide a superior gaming experience. There are already many international online poker providers that happily accept customers from the United States.

None of the federal laws on the books, least of all the Wire Act, enforce penalties against ordinary players. They're all concerned with going after those who manage and run the sites. You're therefore safe from a legal perspective because playing USA online poker is legal.

Take a look at this guide for American online poker players. Within it, you'll learn about all the reputable sites that transact freely in the United States. With the information presented, you'll be able to make a wise choice as to which offshore poker room to sign up for and begin playing at.