Lower Court Nixes DOJ Appeal of Wire Act

It’s official: The 1961 Wire Act only applies to sports events, and does not extend to other forms of online gambling. This good news was clarified by the US Court of Appeals for the First Circuit, which finally put to rest a threat by the Department of Justice that online casino games and lottery games may be illegal.

Ten years ago, the Department of Justice made a surprise announcement that the Wire Act was limited to sports betting only. This opened the door for states and tribal casinos to start offering online games, triggering a multibillion online gambling industry.

In 2018, the DOJ made an about turn on its announcement, saying that in fact the Wire Act applied to other forms of online gambling and wasn’t limited to betting on sports events.

The change in interpretation was challenged by the New Hampshire Lottery, and a New Hampshire federal district judge sided with the lottery. The DOJ took the case to a higher court, but, as noted, was rejected this week.

The Court of Appeals interpreted the Wire Act widely enough that it also provided protection to private gambling companies that offer online services in a number of states, and not just to Lotteries.

“New Hampshire and its vendors should not have to operate under a dangling sword of indictment while DOJ purports to deliberate without end the purely legal question it had apparently already answered. … ,” wrote US Circuit Judge, William Kayatta in his ruling. “We cannot see why the plaintiffs should be forced to sit like Damocles while the government draws out its reconsideration.”

The online gambling industry in the US is now breathing a collective sigh of relief, since it has had this question hanging over its head since 2018. This threat was intensified in April 2019 when the DOJ made another announcement that its ruling may or may not apply to state lotteries.

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