Thread by @pokerprojones

Right, let's put a bit more context behind this tweet from yesterday.

Here's a thread on the history of the Wire Act interpretation over the last decade and its impact on online poker - and where we're going next. /1

https://twitter.com/pokerprojones/status/1351950775551975430

I won't regurgitate the entire decade-long Wire Act story. You can read this on PRO today for more detail; in a couple of hours @SpookyBugs will have a detailed piece up on pokerfuse too.

But very briefly...

pokerindustrypro.com/news/article/2… /2

Circa 1961: Wire Act prevents sports betting from crossing state lines (this is obv pre-internet, so we're talking phoning your bookmaker)

Law is poorly written and leaves open some ambiguity, especially when trying to apply it to a world of online gaming & poker. /3

Dec 2011: Obama-era DOJ's Office for Legal Council clarifies its position on the ambiguous law, saying it only applies to sporting events and contests.

Hooray! We can have shared liquidity in online poker in the US.

pokerindustrypro.com/news/article/d…

2012 /4

Dec 2011: That's handy because right around this time Nevada is moving forward with online poker regulation.

pokerindustrypro.com/news/article/o… /5

Delaware also legalizes online poker, and thanks to the clarity around the Wire Act finally we get shared liquidity in 2015 when 888 announces liquidity pooling between it and WSOP.com in Nevada.

pokerindustrypro.com/news/article/2… /6

2017: New Jersey reaches an agreement joins the shared liquidity pool of Nevada and New Jersey

2018: It goes live.

We start talking in terms of the MSIGA (multistate internet gaming agreement) and 888's AAPN (All American Poker Network)

pokerindustrypro.com/news/article/2… /7

Everyone starts to get excited. Partypoker starts talking about its US Network (currently restricted to just New Jersey, but with plans to expand). Pennsylvania is happening, and provides a big opportunity for e.g. PokerStars to expands its US network. Things are looking up /8

December 2018: DOJ, now under the Trump administration - "actually no, we're rereading the Wire Act again, and this bill actually does apply to non sports contests. Woops! Stop what you're doing."

pokerindustrypro.com/news/article/2… /9

Now, this was pretty much nonsense, and it was not law - just the DOJ opinion. But it does signal where it would focus its law enforcement efforts. It set deadlines on operators to come in line with their new interpretation of the law.

pokerindustrypro.com/news/article/2… /10

So, a couple of things happened:
1) Legal battles were launched asking for clarity on this opinion.
2) It put pause to lots of expansion efforts.

But one thing didn't happen:
3) The WSOP/888 AAPN network did *not* change course and close their network. /11

First, the New Jersey Attorney General filed a lawsuit against the US DOJ, "an attempt to discover if the reversal of opinion on the Wire Act was unduly influenced by casino mogul and staunch internet gaming opponent Sheldon Adelson."

pokerindustrypro.com/news/article/2… /12

But even more important in light of this week's news - the New Hampshire Lottery Commission (NHLC) asked the courts to rule on its position, stating that its interpretation would have an impact on its business.

The DOJ then tried to backpedal.

pokerfuse.com/news/law-and-r… /13

But it was too late. Cat was out of bag.

June 2019: State District Judge rules in favor of NHLC, saying “significant contextual evidence” that Wire Act is limited to sports betting.

pokerindustrypro.com/news/article/2… /14

That article above, if you have access, is a fun dive into some of the legal justification. But I'll screenshot a couple of key bits.

It's always fun to look upon how laws deciding billion dollar industries are decided on grammar of something written half a century ago.

/15

August 2019: The DOJ did not relent. It appealed the decision and continued to postulate that it would be enforcing its interpretation.

pokerindustrypro.com/news/article/2…

/16

2) So, this drags on throughout 2019 and 2020. It pauses all efforts for the expansion of safe, legal regulated online poker. Pennsylvania specifically cites this for delaying its efforts, for example.

pokerindustrypro.com/news/article/2… /17

Sites that had hoped to go live in Nevada and connect it with NJ; or launch in PA and connect with NJ, were put on pause. Most operators can't afford to launch into small, segregated markets.

That's why, as of today, PokerStars remains the only operator in PA. /18

You would be forgiven if you didn't know that West Virginia launched regulated online poker in April 2019.

Funnily enough, no one has sought to go live in a state with a population of 1.8 million if it can't shared liquidity elsewhere.

pokerindustrypro.com/news/article/2… /19

3) But none of this stopped 888/WSOP with their shared network. They vowed in mid-2019 to stay the course, in face of the DOJ deadlines, and were bolstered by the NHLC decision.

That has remain online, and remains legally unchallenged.
pokerindustrypro.com/news/article/2…

/20

So, this leads us to the great news yesterday: The United States Court of Appeals for the First Circuit has upheld the 2019 decision that the Wire Act is limited to sports betting only. /21

Judge Kayatta: “lack of coherence” [POW] in the Government’s reading, it posed “unharmonious oddities” [SLAP] and called its broader argument “even less convincing.” [CRASH] /22

“The government’s reading of the statute, however, would most certainly create an odd and unharmonious piece of criminal legislation. Neither common sense nor the legislative history suggests that Congress likely intended such a result.” [KNOCKOUT BLOW] /23

So, this is a big deal. It is potentially the last efforts the DOJ will make in trying fruitlessly to assert their broad interpretation of the Wire Act; an interpretation that has been struck down in clear, robust terms by every judge so far. /24

There is a path open to them: The case can be taken to the US Supreme Court.

However, if they did, there is no assurance they would even hear the case. If they did, it's hard to see why they would come to a different conclusion.

onlinepokerreport.com/46773/first-ci… /25

And the reality is, there is good reason to believe the DOJ won't pursue these efforts.

It is now under the Biden administration. I'm sure it has other priorities. Nb. Biden was VP during the Omaha administration's original 2011 narrowing of the Wire Act. /26

Also notably, Biden has said in the past he "doesn’t support adding unnecessary restrictions to the gaming industry like the Trump Administration has done.”

pokerfuse.com/news/law-and-r… /27

Also it would be remiss not to note that Sheldon Adelson, who died last month, has - as noted upthread - been linked directly to the Trump OLC reinterpretation. He was the sponsor of the Coalition to Stop Internet Gambling and RAWA (Restoration of America's Wire Act) /28

It is unclear whether anyone else is planning to pick up what was his apparently personal vendetta against the proliferation of safe, regulated online gambling. /29

So, for now at least, the Judge's decision is the last word: The Wire Act relates to sports betting and contests only. Should hopefully be enough for both regulators and operators to proceed.

Michigan already passed a law permitting shared liquidity.

pokerfuse.com/news/law-and-r… /30

This will come into effect in April, at which point the regulator should be able to sign the MSIGA, allowing operators to connect MI and NJ (and NV) player pools. /31

Such partnerships "must not contravene federal law" - but this week's decision should hopefully give the necessary clarity to proceed. /32

Beneficiaries:
Partypoker US - approved in MI this week.
PokerStars - hopefully approved v soon.

pokerfuse.com/news/law-and-r…

/33

WSOP/888 have yet to apply, but can be expected to soon, particularly in light of this Wire Act decision. Just this week:

“We are excited at prospect of adding new states to our unique interstate poker network in 2021 and beyond.”

pokerfuse.com/news/industry/… /34

We could see partypoker also launch in Nevada, something they were approved for back in the summer of 2019, but then dragged heals (again, presumably due to concerns over shared liquidity).

pokerindustrypro.com/news/article/2… /35

And it now seems likely that both PA and potentially WV look at signing the MSIGA in light of this week's court decision - and that, in turn, will lead to two or three new operators entering the PA online poker market. /36

Addendum - this just went up on @pokerfuse with a pretty good summary of all the above.

pokerfu.se/vylc

Addendum 2 - This legal expert has a similar opinion on DOJ likelihood to pursue this to Supreme Court: “DOJ has no motivation, either politically or on a policy basis, to continue to pursue this case.”

cdcgamingreports.com/attorney-doj-h…

“Moreover, even if the DOJ had a reason to pursue it, the likelihood that the Supreme Court would hear the case is extremely low. In either case, this appears to be the end of the road for the opposition to state-authorized Internet gaming.”