Wire Act Questions Loom Large As WV Online Sports Betting Stalls

Posted on March 29, 2019

The recently-revised Department of Justice Office of Legal Counsel opinion on the Wire Act may be slowing the growth of mobile sports betting in West Virginia and other states.

The DOJ reviewed and reinterpreted the 1961 Wire Act to apply to all forms of gambling. It is a big departure from its original opinion that said it only applied to sports betting.

For now, though, the DOJ said the opinion will not be applied for 90 days while the department creates guidelines for prosecution.

It’s this 90-day window that is causing regulators, including the West Virginia Lottery Commission, and gaming companies to take a wait and see approach. The concern is the new interpretation could make currently legal online gaming illegal and subject those in violation to severe criminal penalties.

What has changed for sports betting?

The Wire Act applied to online sports betting before the new opinion and it applies to it now. At the heart of the Wire Act is how the data is transmitted. If data pertaining to sports betting crosses state lines, it could be in violation of the Wire Act.

DraftKings Sportsbook and FanDuel Sportsbook, two companies likely to open shop in West Virginia have created systems to ensure data is contained and play remains within state lines.

The uncertainty over the new opinion stems from its implementation and enforcement, which is currently unclear. It is this ambiguity and lack of clarity that has thrown a wrench into the WV mobile sports market and prompted regulators to proceed with caution.

WV Lottery Director John Myers is being cautious before moving forward with any new online wagering.

According to Myers, the new DOJ legal opinion needs clarification. States and online businesses do not know if the new opinion will be enforced. And if it is, how it will be enforced.

Myers said as much to the WV Metro News.

“We are doing everything we can to try and work through that [the new Wire Act opinion]. We’ve been working through our national organization to try and get some idea on how the DOJ decision is going to come down.”

So, what does this mean for sports betting in West Virginia and other states? That’s the million (or billion) dollar question.

Other stumbling blocks to sports betting

Unrelated to the most recent DOJ Wire Act opinion, sports betting is currently offline at the only online sportsbook in West Virginia and its two land-based casino partners:

Delaware North, the owners of the sportsbooks recently wrote a letter to the WV Lottery explaining the situation.

In the letter obtained by Legal Sports Report through the Freedom of Information Act, Delaware North points fingers at Miomni, it’s sports betting provider.

At the heart of the matter is a contract dispute between Miomni and Entergaming, a third party service provider. Delaware North claims to be in the dark about the dispute and impending shutdown.

There are still three other West Virginia sportsbook operating in the Mountain State:

Unfortunately, sports bettors counting on mobile sports betting for March Madness had to sit this one out. There is no estimate on when BetLucky or another mobile sports betting option will be online.

Unfortunately, it might drag on longer than need be as the implications of the new Wire Act opinion gets sorted out.

West Virginia Leading the Way to a Resolution

Last week, West Virginia Attorney General Patrick Morrisey put together a group of bipartisan attorneys general from 25 states. Morrisey’s coalition is requesting clarification and expressing the apprehension regarding the new opinion.

One of the primary concerns for West Virginia and other states is that new opinion may impact other areas of online gambling outside of sports betting.

Specifically of concern, is the WV Lottery. Typically the state controls the lottery, and include in-state lotteries as well as multi-state lotteries, such as:

  • Mega Millions
  • Powerball

Needless to say, nation-wide lotteries use data that crosses state lines, technically a violation of the recent opinion.

“The loss of these (online gaming) programs would have devastating consequences for our States,” writes West Virginia Attorney General Morrisey. “State-run and multi-state lotteries are a consistent source of state revenue, representing many billions of dollars in annual funding used to fund vital state services such as schools and other educational initiatives, services for senior citizens, and infrastructure projects.”

Additionally, Morrisey and his coalition are requesting a meeting with Attorney General Barr and Deputy Attorney General Rosenstein.

 

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Way Yuhl

Way Yuhl is a freelance writer and blogger. Way recently left his position as a Business professor at Clark University to write full-time while traveling the world. He holds an MBA in International Business and a BA in Geography. You can learn more about his travels at nomadingabout.com.

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