The DOJ Jumps The Fence On Federal Wire Act

There will be massive implications because of the U.S. Department of Justices' new legal opinion on the "Wire Act." Up until now, the DOJ has allowed certain forms of interstate gambling, but that seems to be changing rather quickly. Over the last few years, only select states were permitted to offer online gambling - Nevada, Delaware, New Jersey, etc., but now, that could change drastically. Needless to say, if this new opinion changes to a formal decision, existing deals in Fantasy Sports and even Nevada's online poker partnerships with New Jersey and Delaware could be affected.

A formal posting to the DOJ website has not yet been seen, most likely due to the Government shutdown, but the opinion has been made. The new opinion states that the original 2011 opinion should apply to more forms of online gambling including sports betting, but information at the current time is vague. It is hard to say what will actually change and with no government shutdown end in sight, it could be a few months before the real implications are understood. 

Origins of the Wire Act

Back in 1961, the Wire Act was instilled to combat growing organized crime rings and led to the prohibition of sports gambling and horse-racing on the US communication network. But, the opinion began to be re-examined in the 1990s, and, in 2011, the DOJ's Office of Legal Counsel stated that the former prohibitions were directed solely to sports gambling. 

Probable Loss of Profits

Gambling operators in Nevada, Delaware, and in New Jersey have been able to legally play online poker with each other since a deal was struck in 2014. The impact of the new opinion would likely cease those operations. While it seems like the DOJ will take the stance that all forms of interstate gambling are to be prohibited.