Home Online poker Federal judge confirms Wire Act does not apply to online poker

Federal judge confirms Wire Act does not apply to online poker

0

A federal judge has ruled that the law used to wipe out the unregulated online poker industry in the United States in 2011 does not apply to online poker.

A judge ruled that the Wire Act did not apply to online poker. (Image: State.gov)

The ruling is expected to be the final word on how the Wire Act may be interpreted by the Justice Department in current and future administrations as it relates to the online poker and casino industry.

“The fight is almost over. All courts that have reviewed the Wire Act agree that it only covers sports betting,” I. Nelson Rose, a gambling attorney and professor of gambling law, told CardsChat.

Online gaming company IGT filed a lawsuit in the US District Court for the District of Rhode Island last year to force the court to rule on whether or not the federal government can use the Wire Act to sue the company.

The Wire Act was passed in 1961 to combat the vast network of organized crime bookmakers who used phones to bet on games.

IGT said clarification was needed to protect the company from future lawsuits, and District Court Judge William Smith agreed in the Sept. 15 ruling.

What the decision means for online poker in the United States

Although the ruling only applies to IGT, it will be the final word on the scope of the Wire Act, which only applies to sports betting.

This means that the last gray area regarding the legality of connecting online player pools across state lines is gone.

This was already assumed by the governments of the four states that are part of the Multi-State Internet Gaming Agreement (MSIGA), but may now be considered the rule of law by officials in other states that allow online poker, but may have been cautious about this.

It also gives online sites the assurance that they will not be prosecuted by future conservative governments unless the laws are changed by Congress.

Rose thinks it’s long. “Even if Republicans win the Presidency, House and Senate in 2024, they are unlikely to want to expand the Wire Act to cover other forms of online gambling,” he said.

So far, only WSOP.com has taken advantage of MSIGA by bringing together its players from Nevada, New Jersey and Delaware. Michigan recently joined MSIGA and WSOP.com will soon add its players to the group.

Only time will tell if other online poker companies will follow WSOP.com’s lead, although the odds are now better that they will. The same goes for states that allow online poker, but have not considered expanding their player pools beyond their borders.

Pennsylvania currently allows players from its state to play against each other online, but they cannot compete against others located in other jurisdictions.

It’s the decision of Pennsylvania Governor Tom Wolfe, who will soon be leaving office, whether to ask to join MSIGA or keep the state’s online poker players isolated from the rest of the country. His office told CardsChat they are looking into the matter, but have no further comment.

Connecticut and West Virginia have both legalized online poker, but companies have been reluctant to offer games in those states because their small populations limit the number of players who can play at the sites. Online poker players in these states must rely on their voting representatives to join MSIGA so that they have hope that online poker sites will open there. West Virginia is exploring the option.

How we got here

Prior to 2011, US residents in most states had access to a thriving global online poker market of unregulated rooms that included some of today’s industry leaders, like partypoker and PokerStars. That was until the Unlawful Internet Gambling Enforcement Act (UIGEA) was added late night to the must-have Safe Port Act in 2006.

The UIGEA claimed the Wire Act could be used to shut down all forms of online gambling because sites were taking bets across state lines.

Fast forward to April 15, 2011. Known as “Black Friday”, federal authorities targeted online poker sites and shut down the entire online poker industry in America using the Wire Act. In December of the same year, President Obama’s Department of Justice clarified that the Wire Act applied only to sports betting.

Seven years later, in 2018, President Trump’s DOJ changed that clarification, interpreting that the Wire Act does indeed apply to all forms of online gambling, including poker. This prompted the New Hampshire Lottery Commission to challenge that claim in federal court in 2019. The court sided with the NHLC, both in its initial hearing in 2011 and in an appeal in 2021.

IGT filed its case in late 2021, and after refusing a DOJ request to dismiss the case, the judge agreed that the Wire Act only applies to sports betting.

Rose thinks Congress will now solidify the rules in favor of online poker and casino games.

“If anything, I expect Congress to amend the Wire Act to expressly allow states to decide for themselves what forms of Internet gambling are legal and to aggregate players and take wagers of other states and even nations as long as all governments involved agree,” he told CardsChat. “After all, why should Utah have a problem with Nevada and Delaware pooling online poker players?”

Written by

Bob Pajich

Bob Pajich is a poker journalist, creative writer, and poker player who has never encountered any suited connectors he doesn’t like. If you liked what he writes, follow him on Twitter: @PondHockey2.

This site uses Akismet to reduce spam. Find out how your comment data is handled.

Did you know our poker forum?

Discuss all the latest poker news on the CardsChat Forum