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Mark Hichar, Greenberg Traurig: Wire Act – an Open Issue in the USA

7 August 2019, 07:12
Votes: 1

Does the Wire Act apply to lotteries at all? Or it applies only to sports betting? In general, the gaming industry has a lot of motivated, bright people. There is no doubt that it will continue to expand despite any obstacles.

Mark Hichar, Greenberg Traurig: Wire Act – an Open Issue in the USA

In 2011 the Department of Justice issued a ruling saying that the Wire Act is applied only to sports betting. We’ve had a bit of a change earlier this year. Can you summarize what is going now?

The Wire Act, a law of 1961, has always been ambiguous. In 2009 and 2010 the lotteries in the states of Illinois and New York asked the DoJ for some clarity concerning whether the Wire Act is applicable to lotteries. And in 2011 the Department of Justice declared that it doesn’t apply to lotteries. The law applies solely to sports wagering. Therefore, many states and state lotteries made their games available to their clients on PCs and mobile devices. New Jersey, as well as a number of other states, licensed commercial operators to provide their gaming products online, available on personal devices.

In January the DoJ issued a new note, saying that the decision of 2011 was faulty, and now the Wire Act is applicable to all types of betting. This is the current situation: several state lotteries relied on the 2011 decision and now they have no idea how to bring themselves into compliance, and whether it is possible at all.

So, what now? What would you tell your clients? What are they supposed to do?

The New Hampshire lottery together with two of its vendors have sued the DoJ. They disagree with the recent interpretation and insist that only the 2011 decision should apply. This is one example. Legislative responses could also take place, but not in the nearest future.

What are your thoughts on how the online gambling market is going in the regulated US marketplace? What is your general feeling?

Last April even the idea of a sports betting conference would seem totally unrealistic since it was in May 2018 that the law was overturned and states received the opportunity to choose for themselves whether they want to introduce sports betting on their territory or nor. Gaming is expanding in the USA. However, it should be remembered that only regulated gaming protects consumers. People can regulate how much they play, whether or not there are irregularities, or some of the games are improperly being fixed, etc. It’s impossible with unregulated gaming. So, if to shut down regulated lawful gambling, I fear that illegal market would continue to expand without the consumer protection available in the unregulated gaming market.

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