A Federal Circuit Court ruled against the DOJ’s revision of the Wire Act, which prohibited all types of interstate online gambling activities.
Court Disagrees with 2019 Revision of Wire Act
Interstate online gambling could once again take off after the United States Court of Appeals for the First Circuit ruled Wednesday in favor of the New Hampshire Lottery Commission (NHLC) by rejecting the Department of Justice’s 2019 revision of the Federal Wire Act. The court agreed with District Court Judge Paul Barbadoro’s 60-page opinion released in June 2019 that the 1961 Wire Act is limited to interstate sports wagering.
In 2011, the DOJ interpreted the ambiguous law and limited the prohibition of interstate data transmissions to sports events, before issuing a revision of the Wire Act, dated November 2, 2018, reversing this decision in 2019, under the Trump Justice Department. The decision aimed to ban interstate internet gambling.
“We find that the plaintiffs’ claims are justiciable and that the Wire Act applies only to interstate wire communications related to sporting events or contests. Therefore, we affirm the district court’s grant of the plaintiffs’ motions for summary judgment and its denial of the government’s motion to dismiss and motion for summary judgment,” the court’s conclusion reads.
In 2002, the Fifth Circuit Court of Appeals had already decided that the Wire Act was limited to interstate sports wagering.
Gambling Experts Worry
The ruling sparked hope in the online poker community, which has been particularly affected by the ban on interstate iGaming, and the online gambling sector.
But industry experts and analysts said the First Circuit’s decision on Inauguration Day could do more harm than good to online gambling activities since the Biden administration would have reverted back to the DOJ’s 2011 Wire Act revision. According to gambling specialist and attorney Daniel Wallach, the new administration will not take further action on the matter and the ruling made Wednesday hindered a decision of greater positive impact on the online gambling sector. The government was ordered to pay appeal costs to the NHLC.
The status quo remains on sports betting, but the new administration is not expected to take the case to the US Supreme Court, as Joe Biden was Vice President when the 2011 revision was voted.