[h=1]Update: Justice Department extends delay of Wire Act changes until June 14[/h]Howard Stutz, CDC Gaming Reports · <time class="entry-time" itemprop="datePublished" datetime="2019-03-02T12:03:53-05:00">March 2
</time>
The U.S. Department of Justice extended any implementation of the agency’s revised Federal Wire Act opinion until June 14, according to a memo from outgoing Deputy U.S. Attorney General Rod Rosenstein.
<time class="entry-time" itemprop="datePublished" datetime="2019-03-02T12:03:53-05:00"></time>
The memo to all U.S. Attorneys, assistant attorney generals and the director of the FBI was signed Thursday. The Justice Department originally delayed the implementation until April 15.
“We have decided to the extend that window an additional 60 day (through June 14, 2019),” Rosenstein wrote. “Providing this extension of time is an internal exercise of prosecutorial discretion and does not create a safe harbor for violations of the Wire Act.”
The move allow a legal challenge to the opinion, brought by New Hampshire, to moved forward in federal court.
Two media outlets – GamblingCompliance and Online Poker Report – reported last week the Justice Department was expected to take that action.
The 23-page opinion from the Department’s Office of Legal Counsel that was released in January and reverted to the original interpretation of the Wire Act, the 1961 law that prohibits certain types of betting businesses in the United States. A December 2011 opinion by the Office said the Act pertained only to sports betting.
The new decision, dated Nov. 2, threw out the seven-year-old ruling and added back in other forms of online gaming, including Internet wagering and the sale of lottery tickets over the Internet.
Since that time, the opinion has come under heavy criticism from the gaming industry, including MGM Resorts International Chairman Jim Murren and Scientific Games CEO Barry Cottle during their corporate earnings calls.
The two media reports cited comments last week from U.S. District Judge Paul Barbadoro of New Hampshire, who strongly urged the Justice Department to consider extending the delay. He is overseeing the lawsuit brought by the state on behalf of its lottery, which relies on the online sale of lottery tickets.
The state is asking the court to vacate the opinion, confirm that the Wire Act does not apply to state lotteries, and permanently keep the Justice Department from acting on the opinion.
New Hampshire’s lottery, which supports public education in the state, generated $87.5 million in net profits that went toward funding public schools, according to a statement from Governor Chris Sununu.
Eilers and Krejcik Gaming analyst Chris Grove, writing in Online Poker Report, said the First Circuit Court, where the New Hampshire case is being heard, is “perceived as one of the most favorable venues for Wire Act litigation.”
Rosenstein issued a memorandum on the 90-day delay the day after the opinion was announced, giving “businesses that relied on the 2011 (Office of Legal Counsel) opinion time to bring their operations into compliance with federal law.”
Rosenstein is leaving office this week. Some in the gaming industry quietly hope new U.S. Attorney General William Barr – a state’s rights advocate – will simply opt not to enforce the opinion, just as the department doesn’t opt to prosecute for simple possession of marijuana.
“Given that an (Office of Legal Counsel) opinion doesn’t carry force of law, the next question becomes what, if anything, the DOJ will do in light of the new OLC opinion,” Grove said last month. “The opinion is broad and vague enough to create significant disruption across the gambling industry if applied aggressively.”
</time>
The U.S. Department of Justice extended any implementation of the agency’s revised Federal Wire Act opinion until June 14, according to a memo from outgoing Deputy U.S. Attorney General Rod Rosenstein.
<time class="entry-time" itemprop="datePublished" datetime="2019-03-02T12:03:53-05:00"></time>
The memo to all U.S. Attorneys, assistant attorney generals and the director of the FBI was signed Thursday. The Justice Department originally delayed the implementation until April 15.
“We have decided to the extend that window an additional 60 day (through June 14, 2019),” Rosenstein wrote. “Providing this extension of time is an internal exercise of prosecutorial discretion and does not create a safe harbor for violations of the Wire Act.”
The move allow a legal challenge to the opinion, brought by New Hampshire, to moved forward in federal court.
Two media outlets – GamblingCompliance and Online Poker Report – reported last week the Justice Department was expected to take that action.
The 23-page opinion from the Department’s Office of Legal Counsel that was released in January and reverted to the original interpretation of the Wire Act, the 1961 law that prohibits certain types of betting businesses in the United States. A December 2011 opinion by the Office said the Act pertained only to sports betting.
The new decision, dated Nov. 2, threw out the seven-year-old ruling and added back in other forms of online gaming, including Internet wagering and the sale of lottery tickets over the Internet.
Since that time, the opinion has come under heavy criticism from the gaming industry, including MGM Resorts International Chairman Jim Murren and Scientific Games CEO Barry Cottle during their corporate earnings calls.
The two media reports cited comments last week from U.S. District Judge Paul Barbadoro of New Hampshire, who strongly urged the Justice Department to consider extending the delay. He is overseeing the lawsuit brought by the state on behalf of its lottery, which relies on the online sale of lottery tickets.
The state is asking the court to vacate the opinion, confirm that the Wire Act does not apply to state lotteries, and permanently keep the Justice Department from acting on the opinion.
New Hampshire’s lottery, which supports public education in the state, generated $87.5 million in net profits that went toward funding public schools, according to a statement from Governor Chris Sununu.
Eilers and Krejcik Gaming analyst Chris Grove, writing in Online Poker Report, said the First Circuit Court, where the New Hampshire case is being heard, is “perceived as one of the most favorable venues for Wire Act litigation.”
Rosenstein issued a memorandum on the 90-day delay the day after the opinion was announced, giving “businesses that relied on the 2011 (Office of Legal Counsel) opinion time to bring their operations into compliance with federal law.”
Rosenstein is leaving office this week. Some in the gaming industry quietly hope new U.S. Attorney General William Barr – a state’s rights advocate – will simply opt not to enforce the opinion, just as the department doesn’t opt to prosecute for simple possession of marijuana.
“Given that an (Office of Legal Counsel) opinion doesn’t carry force of law, the next question becomes what, if anything, the DOJ will do in light of the new OLC opinion,” Grove said last month. “The opinion is broad and vague enough to create significant disruption across the gambling industry if applied aggressively.”
