Department of Justice declines to appeal latest Wire Act ruling making interstate online poker legal

In January, the First Circuit Court of Appeals upheld a lower court ruling that said the Wire Act only applies to sports betting, and not all forms of online gambling.
By failing to appeal before the deadline, the DOJ has accepted the latest ruling and will not push to make interstate online poker compacts illegal.

In January 2019, the DOJ released a memo that reversed its 2011 opinion on the legislation. The original law, passed in 1961, stated that using a “wire communication facility” for gambling purposes was illegal. It’s original intent was to curb organized crime activity as illegal sports betting was one of the mob’s largest business ventures.

It was one of the laws used to prosecute those during the federal government’s crackdown of online poker in 2011. After Black Friday, however, the DOJ issued a legal opinion that stated the Wire Act only applied to sports betting, which effectively made online poker legal in the United State.

As several states began legalizing and regulating the activity, there was an appetite for interstate compacts to increase the traffic and ultimately, the liquidity of the player pool. When states first began licensing online cardrooms, poker players could only compete against those that were also inside the state’s borders.

In 2014, however, Delaware and Nevada decided to share player pools. Four years later, New Jersey jumped in and allowed players in those three states to battle against one another. WSOP.com is the only site licensed in all three states, making it the only provider eligible for the compact. PokerStars and the other providers in New Jersey are not allowed to do business in Nevada or Delaware yet.

But in January 2019, that DOJ put the legality of that compact in jeopardy by stating that all forms of interstate online gambling was illegal.

While interstate compacts could dissolve and states could go back to intrastate online poker, the New Hampshire Lottery was running its servers from another state, which put the legality of the entire operation in question. The New Hampshire Lottery filed suit against the DOJ shortly after got a favorable ruling in June when a U.S. District Judge struck down the DOJ’s new legal opinion on the law.

In August, the DOJ filed an appeal, but the COVID-19 pandemic delayed the process long enough so that the first appeal wasn’t heard until last January, which upheld the District Court’s ruling.

By the time the most recent ruling was made, President Joe Biden was elected into office and his administration had much less of a desire to pursue this legal battle. During his campaign, Biden said that his administration would revert to the 2011 view of the Wire Act.

Since the battle over the Wire Act began, Pennsylvania and Michigan launched online poker markets, while West Virginia and Connecticut legalized the activity.
With the most recent development ending any legal ambiguity, coupled with Michigan legislation that explicitly allows for interstate online player pools, there is likely an online poker expansion coming soon.