US Department of Justice rules online gambling illegal

A revised interpretation of decades-old legislation now threatens the legality of online gambling in the United States.

Earlier this week, the US Department of Justice stated in a 23-page opinion that the Federal Wire Act of 1961 should apply to all forms of gaming and wagering.

“While the Wire Act is not a model of artful drafting, we conclude that the words of the statute are sufficiently clear and that all but one of its prohibitions sweep beyond sports gambling,” said Stephen Engel, Assistant Attorney General for the Office of Legal Counsel.

The bill, which prohibits sports betting across state lines, was introduced to combat organised crime syndicates and their illicit gambling operations.

In 2011, under the Obama administration, the DOJ said states were within their rights to allow online gambling practices that did not involve sport.

Nevada, New Jersey, Delaware and Pennsylvania have launched online betting and gaming services as a result, but the new interpretation puts those thriving industries at risk.

Lawmakers and operators in those states, along with the four others that have legalised sports betting since the US Supreme Court struck down the nationwide ban last year, will have 90 days to become compliant before federal regulators start taking action.

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“Moreover, if Congress finds it appropriate to protect those interests, it retains ultimate authority over the scope of the statute and may amend the statute at any time, either to broaden or narrow its prohibitions,” added Engel.

It remains to be seen whether the new ruling will have any impact on the emerging US sports betting industry.

Some legal experts say it will have no effect because the Wire Act has always applied to any form of gambling that involves sporting events.

However, the same cannot be said for online casinos, poker rooms and lottery companies.

“I think the most obviously impacted stakeholders are the lotteries that do internet sales, and that group is the most likely stakeholder to challenge this opinion in court,” said Daniel Wallach, director of the University of New Hampshire School of Law’s Sports Wagering and Integrity Program.

The DOJ’s verdict has met with resounding approval from opponents of online gaming and wagering.

“Today’s decision seamlessly aligns with the Department’s longstanding position that federal law prohibits all forms of internet gambling, as well as with Congress’s intent when it gave law enforcement additional tools to shut down the activity through the overwhelmingly-passed Unlawful Internet Gambling Enforcement Act in 2006,” said former US Senator Blanche Lincoln.

She was speaking on behalf of the Coalition to Stop Internet Gambling – a powerful lobby group backed by Las Vegas Sands chairman and noted Trump supporter Sheldon Adelson.

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