The attorney who successfully fought a Department of Justice reversal of an opinion of the Federal Wire Act said Monday that he expects a favorable ruling on appeal but that the whole case could be rendered moot by the U.S. presidential election.
Matthew McGill, a partner with Gibson Dunn who argued the DOJ case on behalf of a vendor of the New Hampshire Lottery this spring, was a featured speaker Monday on a panel that kicked off the Global Gaming Expo in Las Vegas.
The firm challenged a 2018 DOJ opinion that held that the 1961 federal law applied to all forms of interstate gaming, and not just sports betting. That was a reversal of a DOJ opinion in 2011 that said the Wire Act only applied to sports betting and raised fears that lotteries, progressive jackpots and other gambling would get lumped in with interstate sports betting.
In June, U.S. District Court Judge Paul Barbadoro set aside the DOJ opinion. The DOJ in turn announced in August its intent to appeal to the U.S. First Circuit Court of Appeals.
McGill said that, by the time oral arguments are held sometime in 2020, it could likely be up to nine months before the court rendered a decision. With a presidential election in November, McGill said there could be a new Administration in place then.
“It could go to the Supreme Court, but there’s a lot of ifs and whens,” McGill said. “If we prevail, the Justice Department would have to make a determination on a Supreme Court review. By that time we could be looking at a new Presidential administration with a whole new set of priorities and, maybe, a whole new interpretation of the Wire Act. We’re 13 months away from the next election. It’s entirely impossible the First Circuit may not entirely resolve our case before that election occurs.”
The revision in the DOJ decision has had an impact on the industry in at least one area, according to one panelist. Spin Games LLC CEO Kent Young said that the DOJ’s opinion has slowed the spread of iGaming in the U.S.
“If you look now, there’s only two operators operating iGaming in Pennsylvania,” Young, whose company specializes in on-property and mobile and innovative gaming entertainment, said. “Without the DOJ opinion, there would be (more) up and running now.”
Greg Brower, the former U.S Attorney in Nevada and an attorney with Brownstein Hyatt Farber Schreck in Las Vegas, said if the First Circuit rules against the DOJ, it would be “hard to see a path to victory.” That would be a “wake-up call” for the department, he said.
Brower compared the issue to cannabis, which has seen some states legalize its use despite its being against federal law. The DOJ isn’t addressing cannabis in states where it is legal, he said.
“Here (with the Wire Act) it’s not crystal-clear what the law says, but it seems to be even more likely in this context the DOJ would back off, especially if it suffers defeat in the First Circuit,” Brower said.
Brower said he doesn’t see any scenario where federal prosecutors would go after licensed legal operators for Wire Act violations, or violations of a 2006 law prohibiting payment processing for internet gambling, even though the opinions from the department can’t be ignored.
Despite that opinion, which Brower said “is no small thing,” he said it’s “hard to imagine” the department taking an aggressive posture with wire transactions.
“Of all the compelling priorities that the DOJ has – counterterrorism and other national security cases, violent crime and organized crime, illegal gaming activities and child predators – it’s hard to imagine the department devoting resources to aggressively addressing a problem that, arguably, doesn’t exist,” Brower said.
