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Congress Looks to Block DOJ Wire Act Opinion Enforcement

The regulated online gambling market may be getting help in the most unexpected of places – the United States Congress. As you already know, the US Department of Justice issued a new opinion regarding the Federal Wire Act of 1961 late last year, and since that time, various states have been fighting to get that opinion overturned.

Now it appears that Congress is stepping in to try and offer some assistance in the matter by tightening the purse strings on the DOJ. According to a report from Online Poker Report, Congress is considering a measure that would effectively defund the DOJ’s efforts in enforcing the Wire Act interpretation.

Appropriations Bill Amendment Would Block DOJ Funding Regarding Wire Act Enforcement

Presently, Congress is considering an appropriations bill (HR 3035) that in part provides funding for the DOJ. On Tuesday, select members of the Rules Committee decided to add an amendment to the bill that would block the DOJ from pursuing enforcement of their revised Wire Act opinion.

The amendment clearly states, “None of the funds made available by this Act may be used to enforce the Department of Justice Office of Legal Counsel memorandum entitled ‘Reconsidering Whether the Wire Act Applies to Non-Sports Gambling’ (issued on November 2, 2018).”

What that means is that Congress will fund the DOJ, but they will not be permitted to use any of their funds to pursue enforcement of the measure, effectively blocking them from prosecuting. This would be a tremendous victory for states, at least in the short term, if this measure was to make it to the final bill.

So why would Congress try and step in to help online gambling? The sponsors for the measure are Representatives Hank Johnson and Sanford Bishop of Georgia along with Rep. Andy Barr of Kentucky. Both their states offer online lottery and those operations would be threatened under the new Wire Act opinion.

What’s Next for the Measure?

The next step for the bill will be a Rule Committee hearing on Tuesday, June 25 at 5 p.m. During that hearing, the measure would receive an up-down vote to become part of the final bill. If the measure is successful, that would block DOJ prosecution for the Wire Act for the duration of the bill.

Earlier in the month, federal judge Paul Barbadoro ruled that the Wire Act only applied to sports betting. This was in response to a lawsuit by the New Hampshire Lottery Commission, but it did not end the DOJ’s push to enforce the opinion.

The DOJ announced that they would begin enforcement of the opinion to the end of the year or 60 days following the resolution of an appeal in the case. Clearly, the DOJ is moving forward with an appeal on the matter. Should the amendment to the appropriations bill succeed, then the DOJ would not be able to enforce the memo.

Bill Will Just Kick the Can Down the Road

While this amendment will be a short-term victory for states, it is effectively just kicking the can down the road. HR 3035 is only valid until the end of the fiscal year ending September 30, 2020. Unless next year’s appropriations bill includes a similar amendment, the DOJ could start prosecuting on October 1, 2020.

If anything, this bill will buy time for legal challenges against the Wire Act opinion to play out. Should an appeal fail to play out before January 1, 2020, states will need to make a hard choice whether to continue operating or to comply.

The reason we point this out is that if the Wire Act opinion is not fully overturned, the DOJ will simply wait until legislation no longer handcuffs them before pursuing the online gambling industry. Simply, unless the legal process against the DOJ plays out in state’s favor, this bill is only a short-term delay.

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