Wire Act Enforcement Delay Means New Jersey Can Breathe Easy For Now

Posted on June 19, 2019

Most New Jersey online gambling operators are breathing a little easier this week.

That’s because last week the US Department of Justice decided to delay enforcement of its latest Wire Act opinion. In fact, the DOJ has announced it will not act on the opinion until at least next year.

Essentially, the DOJ directs jurisdictions to hold off on taking any action based on its 2018 interpretation of the Wire Act. The compliance deadline was set for June 14.

WSOP online bracelet events stay open to NJ

With this news, the most visible change for New Jersey may be as it pertains to the 2019 World Series of Poker and the nine online bracelet events.

In early May, WSOP officials announced only two of these events would be open to players in both Nevada and NJ on WSOP.com. The WSOP had scheduled both these events before the June 14 DOJ compliance deadline.

However, on June 16 the WSOP held its third online bracelet event and kept it open to players in both Nevada and NJ.

Additionally, the WSOP has confirmed future 2019 online bracelet events will be open to players in both states. The WSOP has the final online events scheduled for June 23 and 30, and July 3, 7 and 14.

And what about online casinos?

NJ online casino operators can also rest easy. They now know the DOJ will not prosecute any operator for passing data across state lines until at least Jan. 1, 2020.

Although, the memo makes it clear the extension does not create a safe harbor for violations of the act.

In other words, NJ online casino sites could still face prosecution for violations during this time. But only if the DOJ decides to continue to stand by its new interpretation of the act.

Wire Act in 2011 vs. Wire Act in 2018

To make more sense of all that has happened, we have to go back a few years.

This new interpretation of the Wire Act was crafted in 2018. It essentially reversed the DOJ’s 2011 opinion claiming the act only applies to sports betting.

That 2011 opinion is what led several states, including NJ, to legalize various forms of online gambling without federal interference. Since 2013, New Jersey’s online industry has grown to nearly 30 regulated online casinos, poker and sportsbook sites.

The DOJ’s new opinion is that the Wire Act applies to all forms of interstate gambling. Most NJ gambling operators pass at least some data back and forth between servers across state lines.

Therefore, it appeared earlier this year the new opinion had put the entire NJ online gambling industry in the DOJ’s crosshairs.

In fact, the DOJ gave otherwise legal NJ online gambling operators until June 14 to comply with the opinion.

Then, on June 3, a Federal District Court Judge in New Hampshire threw out the new opinion.

Judge Paul Barbadoro ruled the Wire Act applies exclusively to sports betting. At that point, it was not a certainty that Barbadoro’s decision applied nationwide.

Wire Act compliance deadline extended

Reacting to that decision, on June 12 the DOJ issued a memo initialed by Deputy Attorney General Jeffrey Rosen. The memo directed the DOJ not to take any immediate action based on the new interpretation of the act.

One part of the memo reads:

“The Department is evaluating its options in response to this opinion. Accordingly, the forbearance period announced in the Deputy Attorney General’s February 28 memorandum is hereby extended from June 14, 2019 to December 31, 2019 or 60 days after entry of final judgment in the New Hampshire litigation, whichever is later.”

Will the DOJ appeal?

The next step in determining if the DOJ will do that is seeing if the DOJ will appeal the New Hampshire decision.

The memo claims only that the DOJ is evaluating its options.

However, it has moved the compliance deadline to either 60 days after final judgment in the New Hampshire case or Dec. 31. The inclusion of both dates suggests an appeal to the First Circuit Court of Appeals is likely coming.

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Martin Derbyshire

Martin Derbyshire has more than 10 years of experience reporting on the online poker, online gambling, and land-based casino industries for a variety of publications including Bluff Magazine, PokerNews, and PokerListings. He has traveled extensively, attending tournaments and interviewing major players in the gambling world.

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