The United States Department of Justice has decided to extend the grace period during which online gaming operators will not be prosecuted for violations of the Wire Act under the Office of Legal Counsel’s (OLC) recent re-interpretation. The directive was set forth by Deputy Attorney General Rod Rosenstein via a memo to the director of the FBI, U.S. Attorneys, and assistant attorney generals, acquired by CDC Gaming Reports.
To recap what has been going on with the Wire Act, remember that the OLC under the Obama administration issued an opinion at the end of 2011 that stated that the Wire Act applied only to interstate online sports betting, not all online gambling. Prior to that, the DoJ interpreted it as making all internet gambling illegal.
In November, the OLC, now under the Trump administration, reversed course, saying that the Wire Act now applied to all online gambling. When the new opinion was announced in January, it naturally worried operators in states in which online gambling has been legalized and regulated, as well as the governments of those states.
Deputy Attorney General Rosenstein issued a memo at the time, instructing law enforcement agencies to give operators 90 days to reach compliance, which would put the deadline at April 15th. The memo was as follows:
In the January 15, 2019 memorandum to all U.S. Attorneys, the Deputy Attorney General set a 90-day grace period on implementing the Office of Legal Counsel’s (OLC) new opinion during which federal prosecutors should not apply the Wire Act to non-sports-related betting or wagering. This 90-day grace period will allow anyone affected to review the opinion and bring their gambling-related operations into compliance, if necessary. The Deputy Attorney General also indicated that, to ensure continuity across the country, any Wire Act charges must be reviewed and approved by the Criminal Division’s Organized Crime and Gang Section. This new review-and-approval requirement will be codified in the Justice Manual.
Now Rosenstein has issued another memo, extending the grace period for compliance another 60 days, making June 14th the final day of the grace window.
“We have decided to extend that window an additional 60 days (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 Justice Department is already facing a number of lawsuits regarding the new Wire Act opinion, including one by the New Hampshire Lottery Commission. That suit could possibly be heard in federal court before the grace period is over, so this extension could end up being significant. Or not. It remains to be seen.
Not a whole lot has changed in the four states that currently have online gaming up and running: Nevada, New Jersey, Delaware, and Pennsylvania (Pennsylvania has not launched online poker just yet, though it’s coming). The Pennsylvania Gaming Control Board, though, did tell its casinos that they must make sure their gaming servers are located within state borders in order to get into compliance with the Wire Act. Additionally, as it stands now, players on New Jersey’s version of WSOP.com are not eligible for this summer’s online gold bracelet events, even though they were in 2018. The WSOP is still figuring things out – New Jersey is not officially out of luck yet – but I wouldn’t hold my breath if I was in the Garden State.