In January, the District Court for the District Court of Rhode Island approved a request by the Department of Justice (DOJ) to be given a 30-day extension to respond to a lawsuit filed by iGaming giant IGT back in November 2021.
With that extension expiring today, February 23, we could finally get some clarity on the DOJ’s position regarding the Wire Act, though it’s still possible for the executive body to ask for further extensions. The outcome of the case could decide the future of online poker and shared liquidity agreements in the country.
IGT et al v. Garland et al, centers on conflicting Wire Act opinions issued by the DOJ under the Obama and Trump administrations. For decades, all forms of online gambling had been illegal in the US under the Wire Act of 1961. The law prohibits wagers through telecommunications across state lines.
Wire Act Saga
In 2011, the Obama DOJ released a formal legal opinion concluding that the Wire Act only applied to sports betting, clearing the way for US states to legalize online poker. The declaration also played a vital role in the establishment of the country’s first and only interstate online poker compact, the Multi-State Internet Gaming Agreement (MSIGA), which is currently in effect between New Jersey, Nevada, and Delaware.
In 2018, the DOJ under the Trump administration reversed the 2011 opinion. The New Hampshire Lottery sued the DOJ for that reversal. In 2019, the most recent interpretation of the Act was rejected in court. The DOJ took the case to the First Circuit Court of Appeals which upheld the lower court’s decision in January 2021, the same month that Joe Biden was inaugurated as the 46th President of the United States.
The DOJ decided not to take the matter to the Supreme Court, a move many believe reflects the position of President Biden who earlier indicated that he would reverse the 2018 opinion.
IGT Wants the Wire Act Dispute Clarified Once and for All
The refusal of the DOJ to further appeal the New Hampshire case was good news for the industry as that means interstate online poker is now legal in the US.
However, according to IGT’s suit, the New Hampshire rulings only apply to the plaintiff in that case. Meaning its non-sports betting business and many other companies offering the same service could still get hit by the law.
IGT is seeking assertion that its non-sports betting operations won’t face litigation under the Wire Act. It wants the DOJ to clarify its position on the matter once and for all.
So how will the IGT case affect interstate online poker?
While the case isn’t entirely focused on online poker, a decision or settlement on the matter will directly impact shared liquidity agreements.
If the DOJ ultimately reinstates the 2011 opinion, then IGT’s other iGaming operations won’t be at risk of prosecution. Similarly, the MSIGA will continue to stand and other US regulated states can now join the compact without fear of litigation.
The Michigan regulator has already taken the first steps to participate in the deal, but its counterpart in Pennsylvania remains hesitant to hop in to the compact citing the lack of clarity in the ongoing Wire Act dispute.
The IGT, in its prayer for relief, wants a declaratory judgment that the Act only covers sports wagering.
If the ruling goes in IGT’s favor, then the remaining concerns over interstate online poker in the US would be addressed.
Extensions are fairly common according to experts, but they are not discounting the possibility of the DOJ planning a big move.