Jan 16 / 2019
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US Department of Justice reverses opinion on Wire Act

DOJ claims all online gambling now illegal

The US Department of Justice has reversed a 2011 opinion that interpreted the 1961 Wire Act as applying strictly to sports betting. A new legal opinion, authored by OLC Assistant Attorney General, Steven Engel, now claims that all online gambling is illegal.

sigma igaming US Department of Justice reverses opinion on Wire Act
The US Department of Justice has reversed its opinion on the Wire Act

The Wire Act prohibits any type of betting that uses wire communication to transmit information. Both the 2011 and 2018 interpretation is hinged on the grammatical ambiguity of the text, with that of 2011 basing its case on the absence of a comma in the section that reads:

“…the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest.”

The following clauses prohibit “the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers,” but make no mention of sporting events.

The question as to whether the sports wording is applicable only to the second clause of the first section, or if it applies to all three clauses is a question likely to spark fierce debate and uncertainty amongst the online gambling markets in the months ahead.

Betting programs will have 90 days grace to comply with the new regulations before the DOJ potentially cracks down on those in breach of the Act. However, the contrary position taken by the DOJ also means that the department will likely see legal challenges to its opinion, including from legal precedent set by past cases which have upheld the 2011 opinion.

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