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DOJ Files Appeal against Wire Act Verdict

Posted on by John Lathram

Wire ActThe Department of Justice´s Office of Legal Counsel left it until the last possible minute to file an appeal again Judge Barbadoro´s Wire Act verdict.

Back in June, New Hampshire District Judge Paul J. Barbadoro ruled that the Department of Justice´s revised interpretation of the Wire Act “does not withstand scrutiny” and awarded declaratory relief to New Hampshire´s Lottery Commission, several states that had joined the legal action as “amici curiae”, and members of the Multi-State Lottery Association.

The judge´s ruling effectively gave some states (but not all) the green light to continue their online gambling activities, provided that states with regulated sports betting have mechanisms in place (i.e. geo-location blocking) to prevent communications traveling out of state. The judge also gave the Department of Justice sixty days in which to appeal his verdict.

DOJ Leaves it to the Last Minute to Appeal

The sixty-day window would have expired this weekend; but, on Friday, the Department of Justice filed a last-minute appeal with the First Circuit Court of Appeals. The DOJ must still petition the First Circuit Court of Appeals in order for its appeal to be heard, and the document giving notice of the appeal doesn´t give any clues about how the DOJ will better argue its case in any future appeal hearing.

Unfortunately for parties operating in fear of retrospective enforcement action, the case won´t be resolved quickly. The First Circuit Court of Appeals doesn´t reconvene for oral arguments until October, and even then – if an appeal hearing goes ahead – it probably won´t take place until the New Year. In the event the Court of Appeals declines to hear the appeal, the DOJ will likely escalate the case to a higher legal authority. It´s not going to give up until there are no avenues of appeal left.

What Does this Mean for Online Poker Players?

In the short-term, very little. In the long-term, it´s a different story depending on whether you play on a regulated site or an offshore site. With regards to regulated online poker, should the DOJ win its case, it could step in to close down the existing tristate Network. The knock-on effect from this would be to discourage online poker operators from providing a service because – without interstate compacts – it wouldn´t be financially viable (the obvious exception being in California).

For players at offshore sites, the DOJ doesn´t have any jurisdiction over the sites or their license providers. Nonetheless, it could make it difficult for players to access offshore sites (by putting pressure on Internet Service Providers) or to deposit and withdraw funds using fiat currencies. As unlikely as this scenario is, it is worth keeping up to date with the proceedings; and, if you are going to keep a large bankroll on an offshore site, make sure you have a cryptocurrency method of withdrawing available.

Other Implications of the DOJ´s Wire Act Appeal

It is worth repeating that the Wire Act verdict in the New Hampshire court case only gave declaratory relief to some states, and only for non-sports-related gambling. This means that states that weren´t litigants in the original case and states which allow cross-border sports betting transaction can still be prosecuted for non-compliance with the Wire Act.

Until the case is finally resolved (which may take years if it goes all the way to the Supreme Court) nobody can be really sure about what will happen. Certainly, in short-term, it would appear to be business as usual for both regulated and offshore gambling operators, but the landscape of online gambling in the United States could look very different in a few years’ time.

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