The US Department of Justice lost their court case against the state of New Hampshire over the the Wire Act. However, they are still moving forward with plans to enforce their interpretation of the online gambling Wire Act interpretation. Meanwhile, New Hampshire has passed a sports betting bill which contains some interesting language that could disrupt enforcement of the Wire Act even further.
Hello friends, and welcome to This Week in Gambling. I’m J Todd. You know, every now and again something happens in our industry that is quite surreal. And when it does I get to report it! Which leads us to this week’s big story: On our last show we reported how the US Department of Justice had lost their court battle with the state of New Hampshire over their opinion that the Federal Wire act applied to all forms of gambling… not just sports betting. On this week’s show we’re reporting that the DOJ doesn’t seem to give a damn about losing the court case, or what the federal judge had to say. In fact they just sent out a memo announcing that the enforcement of their opinion on the Wire Act has only been delayed.
Deputy Attorney General Jeff Rosen issued a memo setting a date of January 1st, 2020 for their online gambling Wire Act enforcement . And while marijuana is still illegal at the federal level, this decision does beg the question: What the hell is this guy smoking? Jeffery also said that the delay in enforcement is merely “prosecutorial discretion” and it will not protect anyone who violates the wire act between now and then… or violates the DOJ’s opinion of the Wire Act between now and then. Damn that must be some good weed! Seriously though, we always said that this case would most likely wind up at the US Supreme Court. And even though the Justice Department has not officially appealed the New Hampshire ruling, this memo sort of tips their hand a bit.
Meanwhile in New Hampshire, they celebrated their court victory by passing a sports betting bill which now heads to the desk of the governor, who is expected to sign it. I guess he’s not so afraid of a… memo! Actually this New Hampshire legislation does have the potential to change the entire landscape of online gambling in America… all with the inclusion of three little words. We’re gonna talk about that at length when we come back from the break.
Just a reminder that if you like what we do here we would appreciate your support by subscribing to our channel. It’s free, and it makes us feel sort of important. Now, let’s get into why this New Hampshire legislation is so important. To do that, we have to back up a minute. You see the 10th Amendment of the US Constitution gives States the right to regulate gambling within their borders, online or land-based, as long as it’s completely within their borders. So what’s all this fuss about the DOJ and the Wire Act? Well the Wire Act is a federal law, which means it only applies to bets that cross a state line. When it was originally written in 1961 it was intended to apply to organized crime organizations that were using telephone wires to place sports bets across state lines.
Fast-forward to the 21st century and the advent of the internet. Online gambling opponents theorized that since the internet comes through a wire, and that wire crosses state lines, well you get where this shit is going… These same opponents also theorized that the Wire Act applied to all forms of online gambling, not just sports betting, and well you can see where this shit’s going too… except that the judge in New Hampshire just set their ass straight on that. Well, he tried.
Now this sports betting bill that New Hampshire just passed contains a very short, but very significant phrase. A magical little phrase, if you will, that could change the entire way that the Wire Act is enforced. This phrase is “incidental intermediate routing” which may not sound like much until you realize just how the Internet works. You see, when a state regulates online gambling they have to consider geolocation, age verification and payment processing. If any one of those things take place on the Internet and electronically cross the border for even a fraction of a second well, you can bet your butt that the DOJ is going to be there saying it’s illegal based on the Wire Act! Enter these three little words.
Incidental intermediate Routing means it’s okay if one of those components briefly crosses a state line due to the way Internet traffic is routed. It kneecaps a large part of the power that the Wire Act has. Plus it’s a great way for New Hampshire to tell the Justice Department to piss off! So we’re just going to have to wait and see what happens when New Hampshire signs this bill into law. How will the DOJ react to this? What’s the DOJ going to do about the court case that they lost? Time will tell, but most likely it’s going to be long, dragged out and ugly! So stay tuned… this is gonna get good!
