The US Department of Justice is biding time until early 2020 to enforce its new opinion on the Wire Act.
On Wednesday, a memorandum written by Deputy Attorney General Jeffrey Rosen. Specifically, the scope of the memo advises DOJ staff members and the Director of the FBI to delay enforcement. The delay is in place until the start of 2020 or 60 days after the final resolution of the New Hampshire Wire Act case.
A brief overview of the Wire Act
Recently, US District Court Judge Paul Barbadoro issued a 60-plus page opinion. His opinion negated the DOJ’s new interpretation of the Wire Act.
Recall that the New Hampshire Lottery sued the DOJ after a new DOJ 2018 opinion stated that all forms of online gambling violate the Wire Act.
Previously, a 2011 opinion from the DOJ limited the scope of the Wire Act. The limitation applied only to sports betting occurring across states. The previous opinion paved the way for states such as Pennsylvania to legalize online gambling.
The Wall Street Journal and The Washington Post exposed Las Vegas Sands Corporation CEO Sheldon Adelson as the driving force behind the DOJ’s 2018 opinion. As a result, New Jersey’s Attorney General Gurbir S. Grewal filed suit against the DOJ to expose Adelson’s links.
Although Barbadoro’s opinion is considered a win for online gambling, the DOJ is not out of options. An appeal can be filed to the 1st Circuit Court.
DOJ’s power play: No safe harbor for violations of the Wire Act
Although the DOJ conceded to pushing back potential Wire Act enforcement, the memo pointedly states there is no “safe harbor” from violations. In doing so, the DOJ retains the power to prosecute those who violate the Wire Act in the past or present.
The memo makes this point crystal clear:
Providing this extension of the forbearance period is an internal exercise of prosecutorial discretion and does not create a safe harbor for violations of the Wire Act. All other provisions of the January 15, February 28, and April 8, 2019, memoranda remain in effect.
With that, the DOJ doubles down on its new Wire Act interpretation against all forms of online gambling.
Although the DOJ stated in the memo, “the Department is evaluating its options,” we can practically smell the appeal coming to Barbadoro’s opinion.
What about PA online gambling?
Previously, PGCB announced a July 15 start date Pennsylvania’s online casinos. With the Wire Act concern out of the way, that date has one less concern to worry about. Nonetheless, do not be surprised if many casinos are not ready to go by then.
Additionally, we don’t expect any further expansion of online gambling because PGCB took a cautious approach regarding the Wire Act.