State Regulator issues Wire Act warning

Gaming regulators in Pennsylvania are warning operators that they have just 30 days to get compliant with the Department of Justice’s (DOJ) latest interpretation of the Wire Act of 1961. The only problem is that most operators, and regulators, are still very uncertain as to how they can actually get compliant with the DOJ’s very sketchy new rules regarding online gambling.
Pennsylvania appears to be the first state to stake a stab at making its operators conform to the new DOJ scheme. In a letter to operators and their attorneys, Pennsylvania Gaming Control Board (PGCB) Director, Kevin O’Toole took the stance that the Wire Act once again applies to all interstate gambling, but not in-state gambling. That seems to be the general interpretation of the DOJ’s surprise re-visiting of the Wire Act, which took place in November but was not made public until last week.
The gambling world was stunned by the DOJ’s surprise decision to open the Wire Act to forms of gaming beyond sports betting, as that was the gist of the 2011 interpretation of the Act from the Obama-era Justice Department. The gambling world was less stunned when people began to realize that the reinterpretation was a gift to GOP mega-donor, and anti-online poker activist/casino owner Sheldon Adelson. Adelson and his wife contributed more than $100 million to GOP candidates during the recent US mid-term election.
O’Toole acknowledged the confusion and disruption the DOJ’s addled, Adelson-inspired move was in his letter saying, “While we fully recognize that this change may alter the plans of licensees in implementing expanded gaming offerings, it is a change not of the Board’s making but one commanded by the changing interpretation by federal law enforcement authorities. It is your obligation to comply with the federal law in all respects in establishing your gaming operations which must now be entirely ‘intrastate’.”
It will be interesting to see how much operators comply with the new Wire Act before the gambling lobby and American Gaming Association craft a legal response to the situation. Though no actions have been announced, it’s a near certainty that they will occur.