District court strikes down Wire Act opinion

In a decision released earlier this week, U.S District Court Judge Paul Barnadoro has overturned the Department of Justice’s (DOJ) new opinion on the Wire Act.

The Wire Act makes the transmission of wagers across state line illegal. Earlier this year the DOJ released a new opinion on the Wire Act that stated it applied to all forms of gambling.

Previously, under an older opinion, the Wire Act was deemed to apply only to sport betting. In his decision Judge Barnadoro agreed with the old opinion, striking down the DOJ’s new opinion which means it no longer applies to other forms of gambling.

What was Wire Act opinion?

The issue came before Judge Barnadoro after a lawsuit was filed against the DOJ by the New Hampshire Lottery Commission. The Lottery Commission has a partnership with vendors that house their servers in other states which, under the new opinion, would have made their lottery setup illegal.

With the new opinion overturned the Lottery Commission can continue to operate as usual without threat of legal action by the DOJ.

Also benefiting from the Lottery Commission’s court victory are the few states that have legalized online poker. Three states with legal online poker, Nevada, New Jersey and Delaware, have compacts to share player pools.

Under the new Wire Act opinion many believed the interstate sharing of players would be shutdown. Pennsylvania and West Virginia also have legalized online poker, but avoided signing any compact with other states following the new Wire Act opinion. That may change now that the new opinion has been tossed out.

The decision by Judge Barnadoro could be seen as right on time for online poker providers. The grace period issued by the DOJ for violators of the new opinion to avoid prosecution and comply was set to expire 11 days after the decision was released on June 14.

Now that the opinion has been overturned the grace period is meaningless and has no bearing.

The DOJ has not said if they will appeal the ruling. In a statement issued by the DOJ they said they are reviewing the decision and would not be making any other comments.