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If you thought a change in the US Dept. of Justice and the victory for NeoPollard and the Wire Act lawsuit put the issue to bed, your optimism was adorable. A new motion from the DOJ in the dispute signals the federal government isn’t willing to give gambling companies the degree of finality they want.
The DOJ has asked a district court in Rhode Island to dismiss a complaint brought by IGT there that sought to force the government’s hand on the matter. There are a couple of ways to read this action. Those are the classic glass half-full and half-empty interpretations.
What the latest Wire Act lawsuit filing asks for
It’s important to note that this lawsuit is separate from the First Circuit’s ruling last year. The distinction is important because of the complaint’s aim. Essentially, IGT is looking for some assurance of the future.
While NeoPollard and the NH Lottery did get a victory last year, that ruling did not give gambling companies a carte blanche statement that the DOJ would never prosecute them for selling non-sports betting gambling products across state lines. Thus, that’s exactly what IGT is seeking in this new lawsuit in Rhode Island.
The DOJ’s latest filing asks the court to dismiss the case based on a lack of standing for the plaintiff. Its primary argument is that IGT has not shown that it has a plausible threat of prosecution. In simpler , IGT is searching for a solution for a problem that doesn’t exist.
For that reason, it’s possible to read the DOJ’s filing as a signal that IGT has nothing to worry about. However, as IGT has already seen, the wind can change direction on this matter very quickly.
A brief history of the Wire Act lawsuit
The First Circuit’s ruling in January of 2021 blocked the enforcement of a 2018 DOJ opinion on NeoPollard and the New Hampshire Lottery. That opinion could have put them in some legal hot water for selling gambling products online across state lines.
Furthermore, the DOJ has declined to appeal that case to the US Supreme Court, and its deadline has ed. Thus, that matter is closed. The DOJ can’t enforce that opinion against either plaintiff within certain limits. Whether it actually ever intended to is debatable.
As mentioned earlier, the limits mostly pertain to the area the First Circuit court covers, portions of the northeast like New Hampshire. In judicial , that would be called the plaintiffs’ “safe harbor.” The ruling also only pertains to the plaintiffs.
It’s far from an “all-clear” for any gambling company in that area or even the plaintiffs in other parts of the country. In fact, the DOJ referred to those limits in its motion, arguing that IGT is trying to,
“Extend the favorable First Circuit Court precedent to other jurisdictions.”
The US Supreme Court has traditionally held that it is the sole body capable of broadening such rulings. That might be where this case ultimately ends up, but it’s very early. IGT hasn’t been the only party seeking an extension of that safe harbor.
In May of 2019, the attorney general of New Jersey also filed suit against the DOJ over the Federal Wire Act of 1961. In his filing, AG Gurbir Grewal also asked the DOJ to never commit to enforcing the 2018 opinion.
IGT now has a chance to respond to the DOJ’s motion to dismiss. If the court rules in the DOJ’s favor, that could create more uncertainty about the future of online gambling. That’s the glass-half-empty take.
Could history repeat itself in the future?
A bit more of a history lesson should make IGT’s concerns clear. In 2011, the DOJ shut down one of the largest online gambling sites on the web available to people in the US. Later that year, though, Justice issued an opinion that the Wire Act only applies to sports betting.
That gave a lot of gambling companies some confidence to start selling gambling products online. NeoPollard and the New Hampshire Lottery were among them. Then, like a chronic disease that suddenly flares back up, the 2018 opinion came down.
IGT likely wants assurance that this law’s interpretation and possible enforcement won’t change every time there’s a new istration in the White House. With more states looking at legalizing online casino play, online lottery sales, and online poker, they could also soon have new opportunities to expand their business.
It’s hard to do that if they fear the federal government will shut them down in the future. The DOJ’s filing here leaves room for that to occur. At the same time, though, the DOJ could simply be telegraphing that we’re leaving the regulation of gambling to each individual state.
For certain, the DOJ’s action means this is still an issue that gambling companies are dealing with now, six decades after the enactment of the Wire Act. How this case proceeds could influence the expansion of online gambling for years to come.
