Rosenstein Announces DoJ Opinion Will Take Effect

• US Deputy Attorney General Rod Rosenstein signs the enforcement of DoJ’s latest Wire Act Opinion
• Businesses and states have 90 days to cope with the measures
• Online gambling may suffer as a direct result

The newly-struck Department of Justice (DoJ) Opinion might prove too disruptive, especially now that it has been officially set to take effect.

DoJ Reinterprets Previous Wire Act Decision

Republican-heavy, the Department of Justice (DoJ) is now (what seems like) officially reversing the December 23, 2011 ruling of the Wire Act. According to US Deputy Attorney General Rod Rosenstein, DoJ should start applying the Opinion laws after an intial 90-day period has expired:

Department of Justice attorneys should adhere to OLC’s interpretation, which represents the Department’s position on the meaning of the Wire Act.

The document, signed by Mr. Rosenstein on January 15, states that “as an exercise of discretion, Department of Justice attorneys should refrain from applying Section 1084(a) in criminal or civil actions to persons who engaged in conduct violating the Wire Act in reliance on the 2011 OLC opinion prior to the date of this memorandum, and for 90 days thereafter.”

Legal Changes That Bite Deep

The changes to the Wire Act interpretation is set to have repercussions for all cross-state businesses. Legal online gambling is in fact the main prey of the new legislation, which has proven rather too restrictive in nature some fear.

In essence, the previous interpretation of the Wire Act allowed lotteries and online casinos to run their businesses with relative freedom, although local challenges have been many. However, the new Opinion published by the DoJ will effectively reset all progress that has been made, effectively equating all forms of gaming to sports betting, and therefore “banning” those activities under the Wire Act.

Mike Kowall Confident about Online Gambling in Michigan

The developments are counterproductive on all levels, but the question remains – can this Opinion really undo the progress achieved on state level?

While the DoJ opinion doesn’t explicitly say anything against state-level legislation, the Office of Legal Counsel (OLC) has clarified in the opinion itself that:

While the possibility of judicial review cannot sub-stitute for the Department’s independent obligation to interpret and faith-fully execute the law, that possibility does provide a one-way check on the correctness of today’s opinion, which weighs in favor of our change in position.

Put simply, federal courts cannot contest the measure on a federal level, although litigation is almost bound to happen if DoJ goes after shared-liquidity schemes. Inter-state gaming is also dependent on data routing, which can be targeted by the latest interpretation of the Wire Act.

The Possible Fallout

The Wire Act reversal seems to be the culmination of casino mogul Sheldon Adelson’s efforts, as the Washington Post has stated. Mr. Adelson has fought long and hard to limit the scope of online gaming, backed by various political entities and lawmakers.

Adelson’s desire to narrow down the reach of the industry has been superhuman, but the fact remains that too many states have now found the public & political support to fight back.