The Federal Wire Act was originally intended for sports betting. At the time of its passing, most lawmakers were clear on this distinction. However, some tried to argue that the loose wording of the Federal Wire Act could be applied towards modern technology. The debates over the reach of the Federal Wire Act led to the US Department of Justice stepping in to settle things once and for all. The controversy surrounding some states offering online sales of Lottery tickets also led to the DOJ’s Office of Legal Counsel’s involvement. With the DOJ’s Formal Opinion, clear lines were drawn on how far the Federal Wire Act could go in mitigating online gambling in the US. The DOJ’s decision would end up altering the landscape of domestic online gambling, setting up a potentially bright future for the industry.
What Did The DOJ’s Formal Opinion Say?
The US Department of Justice got together in 2011 to deliberate what the Federal Wire Act meant. After their deliberation, the DOJ issued a Formal Opinion that stated the Federal Wire Act only applies to legal online sports betting in the US. This meant that other forms of online gambling, like online casinos and online poker, were exempt from the law’s reach.
What Does This Mean For Online Gambling?
The DOJ’s position on the Federal Wire Act opened the door to the possibility of state-regulated online casinos and poker sites. The DOJ believes that states should have the right to implement a legal and regulated online poker should they choose to do so. Since states no longer have to fear the federal government intervening (albeit the legislation passes a voter referendum first), states could begin claiming revenue from their own online gambling markets. So far, Nevada, Delaware, and New Jersey are the only states to introduce such legislation. Pennsylvania is the next state close to passing a law, with New York and California following closely behind. The hope is to establish some sort of interstate online gambling network as more and more states legalize it.
The DOJ’s opinion also encouraged states to introduce the legal sale of online Lottery tickets. This is welcome news to many states who reported declines in their Lottery ticket sales. Online Bingo options became available as well under the DOJ’s Memorandum.
Has There Been Any Resistance To The DOJ’s Formal Opinion?
Yes. Some lawmakers are pushing for the Restoration of America’s Wire Act, or RAWA, which would reinforce the Federal Wire Act by making all forms of online gambling illegal. This bill has had trouble gaining traction, as the government seems to be moving in more of a supportive direction of online gambling. However, this hasn’t stopped certain members of government from pushing out the legislation. RAWA was first introduced in 2014 but has not made any significant impacts. Newly appointed Attorney General Jeff Sessions has stated on record that he is opposed to the DOJ’s ruling regarding the Federal Wire Act. As Attorney General, his office has the power to review the law, which could be a problem for supporters of sports betting laws as it stands. It seems unlikely Sessions will get to this anytime soon, as his office has other things to worry about, but the fact he has openly stated his disagreement with the DOJ is troublesome.
Does The DOJ’s Formal Opinion Have Any Effect On Offshore Online Gambling?
No. The DOJ’s Formal Opinion, along with the Federal Wire Act, only applies to US-based online gambling. American bettors who gamble with licensed and regulated offshore gambling brands are within their legal rights. You can check out our sportsbook reviews page for a list of offshore sites that are legally licensed to accept American players.
How Does The DOJ’s Opinion Set Up The Future Of Domestic Online Gambling?
With the DOJ’s Formal Opinion in place, domestic online gambling has the potential to grow exponentially. In most states, ambition is being outweighed by logistics as only three states have successfully passed gambling legislation. Still, other states have come out of the woodwork and emerged as online gambling candidates. If the New Jersey case results in a favorable ruling for the state, domestic sports betting will likely be on the table for other states. If this were to happen, states may be more inclined to introduce online gambling with a casino, poker, and sports betting.