Federal Court Clarifies (Sort of) the Wire Act’s Application Beyond Sports Betting

The online gaming industry scored another significant, if limited, win in a lawsuit brought by industry leader International Game Technology (“IGT”) against the Justice Department seeking to clarify the scope of the federal Wire Act.  A federal district court judge in Rhode Island granted IGT’s request for a declaratory judgement that the Wire Act’s prohibitions on interstate communications of betting information apply in the sports-betting context only.  Although expressly limited to the parties before the court, absent an appeal by DOJ, this ruling provides at least some clarity to the online gaming industry as it seeks to grow into new jurisdictions.

This long saga essentially began in 2018 when DOJ’s Office of Legal Counsel (“OLC”) issued an opinion that the Wire Act applied to all forms of interstate communication of betting information.  The 2018 OLC opinion was a stunning reversal of its 2011 opinion, which concluded that the Wire Act applied in the sports-betting context only.  The online gaming industry rapidly developed during the ensuing decade in reliance on this 2011 opinion.  In response to the release of the 2018 opinion, the New Hampshire Lottery Commission (“NHLC”) and others sued DOJ in federal court in New Hampshire, seeking a judgement declaring that the 2018 opinion was legally flawed.  The federal district court in New Hampshire agreed with the plaintiffs’ view of the 2018 opinion, issued a judgement to that effect, and ordered the 2018 opinion set aside.  DOJ appealed and in January of 2021, the U.S. Court of Appeals for the First Circuit affirmed the district court’s decision as to its interpretation of the Wire Act vis-à-vis the parties to the case but vacated the part of the district court’s order setting aside the 2018 opinion thus leaving it place as binding DOJ policy. 

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