Around Christmas of 2011, the Department of Justice’s Office of Legal Counsel (OLC) issued an opinion on the Wire Act, saying that it online made interstate online sports betting illegal, not all interstate online gambling. This paved the way for states to begin legalizing online gambling and so far, four – Nevada, Delaware, New Jersey, and Pennsylvania – have done so. On Monday, the OLC, now part of the Trump administration, published a new opinion, reversing the previous one and saying that all interstate online gambling is against the law.
Basics of the Wire Act
The important part of the Wire Act, passed in 1961, is as follows:
Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.
It was that “interstate” part that led to the OLC opinion in 2011, as the lottery commissions of New York and Illinois wanted to sell tickets online, which they believed was permitted by the UIGEA (the UIGEA says as long as the payment starts and ends within the same state, it is fine), but because payment processing could route out of state, they weren’t sure if it would violate the Wire Act. The OLC told them it was cool, as the Wire Act clearly reads that online interstate sports betting was illegal; the UIGEA wasn’t even considered.
That riled up billionaire Republican donor Sheldon Adelson, who made it his quest to rid America of online gambling, tasking his legal team to write the Restoration of America’s Wire Act (RAWA), which would make the old interpretation of the Wire Act, that all online gambling is illegal, law. It is widely assumed (if not known) that Adelson influenced the Trump administration to reverse the 2011 OLC opinion.
This new one basically does what RAWA intended to do EXCEPT for the fact that the law has not changed. Only the OLC’s opinion has changed.
2018 OLC Sees Things Differently Than 2011 OLC
This new OLC opinion is dated November 2nd, 2018, but published yesterday. It hits on the crux of its reasoning right away:
This Office concluded in 2011 that the prohibitions of the Wire Act in 18 U.S.C. § 1084(a) are limited to sports gambling. Having been asked to reconsider, we now conclude that the statutory prohibitions are not uniformly limited to gambling on sporting events or contests. Only the second prohibition of the first clause of section 1084(a), which criminalizes transmitting “information assisting in the placing of bets or wagers on any sporting event or contest,” is so limited. The other prohibitions apply to non-
sports-related betting or wagering that satisfy the other elements of section 1084(a).
That’s a pretty damn complicated paragraph and believe me, as I am nowhere close to a lawyer, the rest of the 23-page document is even more complicated, going over the existence or non-existence of commas in the Wire Act as well as picking it apart word by word. But it looks like the OLC is saying that because “sporting event or contest” is not mentioned in the second half of the clause, the Wire Act applies to all online gambling.
Of course, to anyone who uses logic to read things, this makes no sense, as it is rather obvious that whole thing applies to sports betting, even if the person(s) who wrote it didn’t opt to repeat the “sporting event or contest” phrase repeatedly. Additionally – and this has been argued on several occasions – it would be ridiculous to single out sports betting if the intent was to ban all online (wire communication) gambling. One would just say “all gambling” or something like that.
Whether or not this will affect any current online gambling or future online gambling is up in the air. As mentioned, it does not change the law at all. If the DoJ decided to attack states with legalized online gambling or sites engaging in it legally, there would be prolonged legal battles. It could scare off states that are looking to get into online gambling, but who knows? Hopefully the DoJ won’t bother to do anything and this is just something to appease Sheldon Adelson.