Pennsylvania Faces Wire Act Re-Interpretation and Warns Operators to Comply with It

The Department of Justice has delivered a new opinion on the Wire Act and the Pennsylvania Gaming Control Board warns its online licensees to ensure their online gambling operations are compliant with the new interpretation of the Act.

A week ago, the PGCB published a memo giving its licensees 30 days to clarify how their operations might get affected by the new interpretation of the Wire Act. The Office of Legal Counsel made the new interpretation of the 1961 Wire Act public, explaining that it did not only apply to sports betting but to most of the interstate online gambling forms.

 

Why the Confusion?

The confusion is a result of the uncertainty with which the new opinion was explained in practical terms. Most started believing that the pact for online poker liquidity sharing between New Jersey, Nevada and Delaware operators sounds really unpromising as of now.

Furthermore, the National Thoroughbred Racing Association issued a public statement urging credit card processors and banks not to stop processing bank transactions for deposit wagering operators, even though the Wire Act clears horseracing as a gambling form only, since it got its federal green light in 1978.

However, most observers were right. PGCB explained in the memo that bets and wagers should not cross state lines, even though the new opinion does not entirely negate the premise that intrastate activity is permitted, as provided by state law.

But there is a problem with PGCB’s current regulations since they permit online operators to base their digital infrastructure even outside the state. Therefore, now the PGCB no longer believes that these regulations are consistent with the law as articulated in the new opinion and urges its online licensees to abide by the new opinion, for now. Explaining that this change is not courtesy of the Board but is commanded by the federal law enforcement authorities and the changing of the interpretation, he urges them to comply with the new opinion until everything becomes clearer.

When Will It Take Effect?

In its memo, Pennsylvania Gaming Control Board has given its online gambling licensees until 18^th of February to investigate and submit their analysis along with details and suggestions of any necessary course corrections depending on their individual situations.

The Board gives them 30 days to note how their operations would get affected before the 15^th of April deadline draws near. Until then, the PGCB intends to do analysis on their own and come up with the perfect response which will fit the regulations but will work for operators as well.

Who Crafted the New Interpretation?

Rumour has it that the new opinion followed the memo asking the OLC to have a second look on the Wire Act in 2011, drafted by Charles Cooper, one of Adelson’s hired guns. Sheldon Adelson is Las Vegas Sands’ owner and a huge opponent of online gambling. In fact, he is also a major Republican campaign donor.

It is believed that Adelson pulled strings to stop states like Pennsylvania which are in the process of launching their online casinos and prevent states which were considering the creation of the intrastate online club.