Reversing the Reversal: Creating Wire Act Chaos

Late in the afternoon of January 14, 2019, the U.S. Department of Justice (DOJ) released a new memo reversing its stance on the Interstate Wire Act of 1961. This 23-page memo, issued by the DOJ’s Office of the Legal Counsel (OLC) and dated November 2, 2018, stressed that the Wire Act applies to all forms of gaming. The memo reversed an earlier DOJ memo issued in 2011 which stated that the Wire Act only applied to sports betting.

The action, which at best can be described as reversing a reversal, raises several concerns for the gaming industry, especially for online gaming that occurs in the states of Nevada, New Jersey and Delaware, in addition to active online gaming startups under way in Pennsylvania. Taken in its strictest form, the decision may also have serious implications for mobile gaming, sports betting, daily fantasy sports (DFS), lottery, and potentially even internet/social media marketing programs. Global Market Advisors (GMA) had predicted for some time that the reversal of the 2011 memo would occur during the Trump administration through the efforts of the Coalition to Stop Internet Gaming (CSIG).

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