The news was inevitable, but it is nonetheless a disappointing day for online gambling proponents. The Department of Justice officially filed an appeal in its legal battle with the New Hampshire Lottery.
The DOJ had until Aug. 19 to file an appeal but beat that deadline with three days to spare.
In June, Judge Paul Barbadoro of the New Hampshire District Court issued a 60-page opinion siding with New Hampshire in the case. Within that opinion, Barbadoro noted that grammatically, the 2011 interpretation of the Wire Act is more accurate than the newer opinion, issued in late 2018. As such, the Wire Act only applied to sports betting, not the broad swath of activities suggested in the 2018 DOJ opinion.
What does this mean for PA online gambling?
First things first: don’t panic.
The expectation was that the DOJ would appeal this decision, so it shouldn’t come as a surprise. In the meantime, expect PA to continue to launch and operate its online casinos and online sportsbooks.
Recall that the Pennsylvania Gaming Control Board (PGCB) required operators to submit plans to adhere to the newer, stricter Wire Act interpretation earlier this year. That means all online gambling sites currently operational in Pennsylvania adhere to the new Wire Act opinion should it be enforced in the future. The earliest the opinion would even be enforced is 2020.
As for new operators, do not expect any to get gun shy because of the appeal. Judge Barbadoro’s opinion ruled very strongly in favor of the NH Lottery and its operating partner NeoPollard. That decision has sites more confident than before that this new opinion will not have the far-reaching effects the industry was initially concerned about.
The only thing you might see impacted is online poker compacting. Let’s be honest though, PA is struggling to get online poker off the ground period. Compacting with other states is probably not imminent to begin with simply because of how behind the online poker process is compared to other new online gambling verticals.
What is next for the Wire Act case?
Now that the paperwork is filed, the next step is for the DOJ to formally petition the First Circuit Court of Appeals to hear the case. It is up to the court how things proceed.
It will be a few weeks before anything could happen, as the court will not be in session again until October.
Meanwhile, the industry is already criticizing the DOJ’s actions. Jeff Ifrah, head of the trade group iDEA Growth had the following to say:
“The Department’s action, while hardly unexpected, is certainly unwarranted. DOJ generally files appeals of adverse district court decisions as a matter of course. We hope that, rather than engaging in a protracted, expensive and ultimately unsuccessful legal fight, the Department will take this opportunity to negotiate a settlement which will focus the Wire Act and DOJ’s enforcement resources on the right targets – the unlicensed illegal offshore Internet gambling operators who do not create jobs or tax revenue in the U.S. and do not appropriately protect consumers.”