Legislation

US – First District Court of Appeals kicks out notion of wire act’s interpretation

By Phil - 22 January 2021

The First District Court of Appeals in the US has ruled that the 1961 Wire Act should only be applied to sports betting, kicking out the Department of Justice’s suggestion that it could also ban other forms of inter-state gambling, such as online gaming, lotteries and poker.

The claim from the Justice Department came in 2018 suggesting that the interpretation of the 1961 law criminalising wire transmissions for gambling should not be limited to just sports betting.

US Circuit Judge William Kayatta said: “The lack of coherence in the government’s proposed reading” of the 1961 law “strains common sense.”

He ruled that the 1961 law wasn’t ‘perfectly clear’ due to shorthand being used and that the whole law should be applied just to sports betting. An underlying suit brought by New Hampshire’s Lottery Commission garnered support from 19 other states.

Judge Kayatta said: “A statewide operation integrating over a thousand retailers and multi-state relationships to produce almost $100m in net revenue does not strike us as an operation that can be easily wound up in 90 days. Nor can a state legislature plan sensibly if such a relied-upon revenue stream finds itself suddenly subject to a three-month closure notice.”

He added: “New Hampshire and its vendors should not have to operate under a dangling sword of indictment while DOJ purports to deliberate without end the purely legal question it had apparently already answered. … We cannot see why the plaintiffs should be forced to sit like Damocles while the government draws out its reconsideration.”

American Gaming Association President and CEO Bill Miller welcomed the ruling, saying: “Today’s ruling by the First Circuit provides important certainty for those who wish to innovate and invest in mobile gaming products,” he said in a statement. “Across the country, state and local economies rely on valuable tax revenue from gaming operators, which remains critical as our nation recovers from the economic impact of the pandemic. The gaming industry is one of the most regulated in the country, and our members remain committed to operating within the confines of the legal, regulated market, as they do on a daily basis.”