Back in December of 2018, the US Department of Justice (DOJ) shocked the US online gambling community by reversing its 2011 decision that essentially proclaimed the Wire Act of 1961 only pertained to sports gambling. The new decision by the DOJ put a lot of state legislators in an awkward position at a time when they are working to decide the fate of online gambling for its respective citizens.
The Wire Act of 1961 was federal legislation that was passed to ban US residents from funding gambling accounts through the use of a money wiring system. For all practical purposes, a money wiring system meant bank wires, credit cards or third-party transfers (Western Union) since debit cards and PayPal didn’t exist at that time. It’s also noteworthy that gambling accounts actually meant bookies since the internet gambling industry was 36 years away from existence. That’s right. People didn’t have access to an online gambling websites like Gclub – Casino until late in the 20th century.
Based on the December 2018 opinion, all existing forms of online gambling would join sports gambling under the federal ban. That means horse racing websites, lottery sites and online casinos would no longer be allowed to accept deposits from customers via any kind of wire supported transaction. This would have a profoundly negative effect on online gambling providers and gamblers alike. The only option gamblers would have to fund their gambling accounts would be in person through deposit outlets the online gambling operators would have to provide.
The Courts Throw Out the DOJ Ruling
After the DOJ issued its December ruling, the New Hampshire Lottery Commission took offense to the ruling. The NHLC relies heavily on online funding from lottery players in support of the New Hampshire Lottery. While the DOJ’s decision did not directly address the lottery industry, the New Hampshire government wasn’t willing to take any chances. A request for an injunction against the DOJ was sent to a federal court to be adjudicated.
Word came back this past weekend that Judge Paul Barbadoro issued a ruling is support of the NHLC’s position. In Barbadoro’s ruling, he stated: “I hereby declare the Wire Act only applies to transmissions related to bets or wagers on a sporting event or contest. The 2018 Office of Legal Counsel opinion is set aside.”
The news was welcomed by much of the US gambling community, at least for the time being. A number of states that are currently working on legislation regarding the legalization of sports and online gambling are now one step closer to clearing the last big obstacle, that being the funding options for online gambling accounts.
At this point, the DOJ has a choice. They can accept the lower court’s ruling and reverse its reversal, or they can appeal to the US Supreme Court. With a great majority of the states supporting online gambling, this would be the perfect opportunity for Attorney General William Barr to gracefully back away from what was clearly a bad opinion. If the DOJ wants to continue the fight, it’s clear the states are ready to do just that.