The past few months have seen some exciting legislative amendments, which are rapidly changing the landscape of online gaming. May was especially exciting for New Jersey with some huge changes –many of which have not even gone live yet as lawmakers finesse local state legislation.
The first few weeks of May were abuzz as shared player pools became a reality for online poker players from New Jersey for the first time. They joined Nevada and Delaware, which had been enjoying this freedom since 2014. Then in mid-May, there was the landslide vote at the US Supreme Court, as 6 judges decided that the PASPA legislation violated the 10th amendment – this effectively opening the floodgates for sports betting.
The question now being posed is whether legalized sports betting will enjoy the same inter-state freedoms enjoyed by NJ poker players.
So, how viable is this? The answer is – perfectly possible. But not under current legislation!
The next hurdle for the gaming industry to clear to allow for inter-state sport-betting will be challenging the Wire Act of 1961. This is a federal law which was designed to avoid organized crime and enforce existing gambling laws. Effectively, this prevented people from placing wagers by “wire communication” which now includes the internet by definition.
Poker is not covered under this provision as the law relates specifically to sports betting. In 2011 the US Department of Justice clarified this with the following statement: “Interstate transmissions of wire communications that do not relate to a “sporting event or contest” fall outside the reach of the Wire Act”. The provision could really not be any clearer.
Given that currently there are a number of sportsbooks operating in multiple states, with tens, if not hundreds of outlets each, it seems unlikely that this legislation will go unchallenged in pushing for inter-state sports betting.
Paul Hastings Law Firm in Washing DC has questioned whether the Wire Act of 1961 was ever even intended to apply to legalized sports betting. And how vociferously will the Department of Justice pursue cases of sports betting between states? Some experts believe that it will not be a priority – but let’s not test this theory since it is currently a legal provision.
In the interim, the following states eagerly await their first sports bets to go live following the new Supreme Court ruling: Delaware, Mississippi, West Virginia and Pennsylvania. Everything hinges on the states’ own legislative provisions being in place first.
Only once several states are operating live sports betting online, can we realistically look forward to any sort of challenge to the inter-state provisions. It’s going to be another interesting development to watch!