January 20, 2021
The way forward for future online poker legislation in the US may be clear.
New Hampshire won its second straight court victory against the US government, reported Jeff Ifrah, an attorney on the case. The Court of First Instance ruled that the Wire Act only applies to sporting events and competitions, which means that online lottery – and, what is of interest to the poker industry, interstate online poker – is not against US law.
This followed a first identical decision by a U.S. district court in June 2019 in New Hampshire’s favor.
The state filed a lawsuit against the government after a late 2018 memo changed the Justice Department’s stance on the matter.
Barring a final appeal to the US Supreme Court, the continued growth of online poker in the US is unlikely to be stopped right now.
Story of the case
Originally, the DOJ paved the way for online gambling legislation in the United States for the Obama administration by issuing a statement in 2011 that the Wire Act of 1961 only applies to sports betting.
The Trump administration somewhat surprisingly reversed this stance with the release of its own memo in 2018.
The content of the statement came as no shock when you consider that Republican megadonor Sheldon Adelson had long pushed for a law to ban online poker. He eventually found himself with the influence he was seeking when his support for Donald Trump helped elect the controversial candidate. The timing, however, struck many as suspicious considering it happened in the midst of a government shutdown and just before William Barr, a noted state rights advocate, could be promoted to head the DOJ.
New Hampshire put on their riot gear and brought their lawsuit, and the poker world watched with concern as the litigation began, among other things.
Meanwhile, the government announced a suspension of the reimagined Wire Act, which would allow online poker to continue normally for the time being. The memo still hung a cloud over the industry, preventing Pennsylvania – which launched online poker in 2019 – from joining the shared player pool, for example.
It wasn’t long before US District Judge Paul Barbadoro ruled in New Hampshire’s favor. While putting the DOJ’s opinion aside for the moment, he suggested that he expected the matter to be finally settled by the Supreme Court.
The United States Court of Appeals for the 1st Circuit held an oral hearing over a virtual call in June 2020. The DOJ’s attorney tried to bypass the lotteries in hopes the case will be dismissed, likely to target online poker companies later.
Reasons for the decision
Fortunately for poker players in the US, the judges didn’t have it. One said he saw no difference between lotteries and other companies in the memo, a point the DOJ’s attorney admitted.
This would eventually become one of the reasons the two surviving judges – Juan Torruella had meanwhile died – published their ruling in New Hampshire’s favor.
“We cannot understand why the plaintiffs should be forced to sit like Damocles while the government re-examines them,” reads the verdict, which can be seen here in full.
The biggest problem was the government’s interpretation of the Wire Act – which applied to all betting, not just sports betting – which, according to a letter from US Circuit Judge William Joseph Kayatta Jr., simply failed to pass the test.
“However, the government’s reading of the statute would certainly create a strange and inharmonious piece of criminal law,” he wrote. “Neither common sense nor legislative history suggests that Congress likely intended such an outcome.
“Indeed, there is strong evidence from the history of legislation that Congress has in fact focused its efforts solely on gambling in sports.”
The online poker report provided a more thorough breakdown of the syntax here.
Good times ahead?
Will the Supreme Court hear the case and make a final decision as Judge Barbadoro predicted? The signs point to No.
First and foremost, the newly inaugurated US President Joe Biden has already indicated that he is against the reinterpretation of 2018. This makes sense since he was Vice President of the Obama administration, whose DOJ released the first statement that allowed online gambling legislation in the US to be seriously enacted
Plus, Adelson’s death marks the end of the most ardent and best-funded opponent of online gambling.
What does that mean for the future?
The hope is that online gambling legislation will have few obstacles left. A well-known law firm in Michigan predicted that the Biden Administration would provide “a clear path for expanded use of Internet communications for other gaming products.”
While federal legislation still seems unlikely, advocates of online poker can be hopeful on two fronts: More states will legalize online poker, and those same states can jump into the common pool of players without fear of the federation moving across the board Line interferes.
Michigan recently passed a bill allowing it to enter the shared liquidity pool, so the ball is already rolling on that front.
The more states that are included in the pool, the more attractive online poker becomes as it can generate more revenue. The future of online poker in the US looks brighter now than it has been in years.