Poker, DFS could suffer the worst due to DOJ opinion

The Justice Department’s “unsolicited” update to the Wire Act could have a huge impact on poker

After eight years, the Department of Justice (DOJ) decided that its previous opinion on the Federal Wire Act was wrong. It issued an update, stating that the act didn’t just apply to online sports gambling, but to all forms of online gambling. While it has been nice enough to allow a 90-day grace period to give time for public feedback, the shockwaves are already being felt and poker and daily fantasy sports (DFS) are probably going to suffer more than other forms of gambling.

The DOJ’s stance virtually prohibits any type of interstate commerce of the gambling sector. No more player liquidity pools in poker, no more DFS interstate competitions. According to analysts with Regulus Partners, “Breaking DFS into a state-by-state framework is likely to be practically unworkable outside the very largest states, in our view: undermining liquidity, critical commercial synergies and stakeholders’ perception of what is acceptable regulatory risk.”

With regards to player liquidity in poker, the analysts assert, “Another area that will need dumping from state legislation or testing is the ability to accept play from other authorised states where online gaming has been legalised.”

The updated opinion was published by the Assistant Attorney General for the Office of Legal Counsel, Stephen Engel. The DOJ’s Criminal Division had asked the DOJ to review the previous opinion, which explicitly stated that only sports gambling was prohibited across state lines.

In issuing the update, Engel asserted, “While the Wire Act is not a model of artful drafting, we conclude that the words of the statute are sufficiently clear and that all but one of its prohibitions sweep beyond sports gambling.”

After all the hard work and effort of gambling enthusiasts, the industry appears close to being back at square one, thanks to the opinion of only a very small number of individuals (or possibly only one).

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