A victory for interstate poker

The US Department of Justice (DOJ) has let a deadline expire without appealing a federal Wire Act ruling in favor of the New Hampshire Lottery, opening the door for new interstate online poker compacts across the country.

the court concluded that the legislation of 1961 is only applicable to sports betting

In January this year, the US First Circuit Court of Appeals overturned the DOJ’s 2018 revised opinion that the Wire Act applies to all forms of gambling. Instead, the court concluded that the legislation of 1961 is only applicable to sports betting, not to online poker, lotteries, or any other forms of gambling.

The DOJ had a 150-day appeal window to take the case to the US Supreme Court if it intended to pursue the issue. The deadline for that additional appeal passed on Monday.

Jeff Ifrah, general counsel for online gaming advocacy group iDevelopment and Economic Association, confirmed on Twitter that the DOJ has decided not to appeal the decision:

Several states can now sign deals to allow online poker operators to form interstate player pools as soon as this year, including potentially the lucrative markets of Pennsylvania and Michigan. As a result, Ifrah has hailed the DOJ’s inaction as a “victory for states’ rights, for clarity in the reading of federal statutes, and for the gaming industry and its consumers.”

More than two years of disagreement

The US government introduced the Wire Act in 1961 as a way to combat organized crime-driven gambling activities across state lines. Because of a lack of clarity surrounding its language, the DOJ provided an interpretation of the legislation in 2011 under the Obama Administration. The body concluded that the Wire Act related only to sports betting.

Nevada, Delaware, and New Jersey set up an interstate poker compact

After the DOJ’s initial ruling, Nevada, Delaware, and New Jersey set up an interstate poker compact to allow shared liquidity. Known as the Multi-State Internet Gaming Agreement (MSIGA), the deal opened the door for players to compete against those in other states. Other jurisdictions, such as New Hampshire, began offering online lottery options.

In 2018, the DOJ reversed its initial opinion on the Wire Act. It argued that the legislation pertained to all online gambling, including poker and lotteries. Of course, this ruffled a few feathers in the gambling sector, prompting a lawsuit filing by the New Hampshire Lottery in February 2019.

A federal judge ruled in favor of the lottery just four months later, confirming the DOJ’s 2011 position that the Wire Act applied only to sports betting. A federal appeals court seconded that judgment in January this year after the DOJ attempted to overturn the ruling. Despite acknowledging the unclear language of the Wire Act, both courts disagreed with the 2018 reinterpretation.

Poker growth anticipated

By combining interstate player pools for online poker, operators across the US can allow gamblers from different jurisdictions to play each other in table games and tournaments. In turn, this will allow them to offer larger prize pools and attract more players to legal sites, improving their chances in the fight against offshore competition.

888poker is the US’s only operational interstate online poker network

The passing of the DOJ’s appeal window on Monday provides some closure for states hoping to form interstate deals. Currently, 888poker is the US’s only operational interstate online poker network. Combining customers in Delaware, Nevada, and New Jersey, the network features WSOP NJ, WSOP NV, 888poker NJ, and three racino skins in Delaware.

Pennsylvania and Michigan could be next to join the party. Speaking last month, 888 Holdings senior vice president and head of US Yaniv Sherman said 888 partner WSOP will launch in both states this summer. Meanwhile, PokerStars USA has a substantial share of the online poker markets of Michigan, Pennsylvania, and New Jersey. Similarly, BetMGM has a ring-fenced poker network in the same states.