Federal Court Calls BS On New Wire Act Opinion, Shuts Enforcement Down

Posted on June 3, 2019 - Last Updated on June 4, 2019

May was a disappointing month for PA gamblers, what with delays, lackluster launches, and more broken promises.

June is shaping up to be a month of big wins, though. The biggest of all comes from the New Hampshire District Court. On Monday, the court’s Judge Paul Barbadoro issued a 60-plus page opinion that sided squarely with online gambling, lotteries, and casinos and squarely against the Department of Justice.

New Hampshire brought about the suit in the wake of a revised Wire Act opinion from the DOJ’s Office of Legal Counsel. In it, the DOJ basically said all forms of online gambling violate the Wire Act. The wide scope of the opinion scared the gambling community. For, if the DOJ chose to do so, it could enforce the opinion on everything from online sports betting to Powerball.

Thankfully, the court sided with the gambling interests, dismissing the 2018 opinion entirely and ruling in favor of the NH Lottery.

More on Barbadoro’s decision on the Wire Act

Barbadoro’s opinion mostly consists of an in-depth grammatical analysis of the Wire Act. This is unsurprising considering the new Wire Act hinged on a couple of commas.

His deep grammar dive explored a variety of arguments offered by both sides. In the end, this was the conclusion:

Before me are the Government’s motion to dismiss for lack of standing and the parties’ cross-motions for summary judgment. Based on the text, context, and structure of the Wire Act, I also conclude that the Act is limited to sports gambling. Accordingly, I deny the Government’s motions and grant the plaintiffs’ motions for summary judgment.

Additionally, Barbadoro was not persuaded by the DOJ’s argument that the NH Lottery was not in immediate risk of being affected by the new ruling. The OLC refused to offer any insight on how it would approach state lotteries offering an online product or multi-state draw game despite Barbadoro expressly requesting that plan.

As such, Barbadaro found a preponderance of evidence to suggest the NH Lottery had every reason to be concerned and that summary judgment was required.

Further along the spectrum, but still satisfying the imminence requirement, are cases where a plaintiff has engaged in behavior that a statute arguably makes unlawful, the plaintiff intends to continue to engage in the allegedly unlawful behavior, and though the enforcement process has not yet begun, the risk of future prosecution is substantial.

What’s next for the Wire Act case?

This does not necessarily mean the end of the 2018 Wire Act opinion. The DOJ can appeal to the First Circuit Court if it wants to do so. The good news is that, barring the Circuit Court enjoining the lower court’s opinion, there will be no enforcement of the new opinion until the appeal is over.

That means we can throw that June 14 enforcement date out the window. Given how long the appeals process takes, it could take months to get an answer from the higher court.

Moreover, as of now, we do not even know if the DOJ will move forward with an appeal. Barbadoro basically scoffed at every argument the state presented. That doesn’t inspire much confidence that an appeal would generate a different result.

What is next for PA online gambling?

We know the Pennsylvania Gaming Control Board (PGCB) is notoriously gun shy. So, until they hear an official word no appeal is coming, they may continue with the current careful, measured approach.

It is not unreasonable to think they will move forward on elements of gambling expansion after such a sound victory in court. Which group benefits the most from the Wire Act news?

Pennsylvania online poker players.

When the Wire Act opinion came down this past winter, online poker compacting ended up square in the legal crosshairs. The clearly interstate venture, along with multi-state lottery draw games, seemed like the two forms of gambling most in violation of the new interpretation.

The threat was so real that the World Series of Poker said New Jersey and Delaware players would only be able to play in the online bracelet events taking place before June 14. Presumably, in the wake of the decision, the WSOP will open back up the online events scheduled for later in the summer.

Most importantly, though, the decision brings the idea of Pennsylvania entering the online poker compact back into play. If PA opts to join the existing three-state compact, the size of the player pool would immediately double. With double the people, you can expect:

  • Bigger prize pools
  • Bigger guarantees
  • A healthier US online poker market

Don’t expect these changes tomorrow, but this decision just opened up several doors that had been closed since January.

Jessica Welman Avatar
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Jessica Welman

Jessica Welman is the managing editor of PlayPennsylvania. A longtime poker media presence, Jess has worked as a tournament reporter for the World Poker Tour, co-hosted a podcast for Poker Road, and served as the managing editor for WSOP.com.

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