The U.S. Department of Justice has asked for a judge’s permission for more time to interpret the Federal Wire Act. This is part of its long-running feud with states that have online gambling.
The judge has given the federal government two weeks to decide whether the Wire Act applies to online gambling. The deadline may mean the 16-state lawsuit against the federal government will either continue or become a nonissue.
What Is the Wire Act?
Congress passed the Federal Wire Act in 1961. The act outlawed money being transferred by wire to pay for gambling proceeds. At the time, the federal government was in a battle with organized crime. The purpose of the Wire Act was to cut off wire transfers between banks and organized crime. The hope was it would get rid of some crime families all together. Over the years, the government has used the act to combat all sorts of crime. However, many experts have noted that the law is outdated because so much business has moved onto the Internet. The law has been in existence longer than there was such a thing as personal computers or the Internet.
Why Is There A Fight Now in New Hampshire?
Originally, federal regulators said the Wire Act did not apply to gambling operations in states where gambling is legal. The courts ruled as far back as 2002 that the Wire Act only applied to sports gambling. At the time, it was only legal in Nevada. However, last November, the Justice Department reversed its course. It said the Wire Act applied to states that had online gambling.
Given the backlash against the review, however, the Justice Department said in December it would delay enforcing the law. The department gave the states 90 days to comply. New Hampshire sued the government to stop the enforcement, and 15 other states followed.
New Hampshire does not have online casino gambling or sportsbooks. The state has not prohibited its residents from playing poker online or gambling online. The New Hampshire law states that a resident can’t own an online gambling business. The state’s gripe with the federal government is over its blooming online lottery business. It has online lottery games, which have been very popular in the state. People can purchase online Powerball and Mega Millions tickets. The most popular online lottery games are instant e-games. Players pay for online scratch-off tickets and can collect instantly if they win. Experts have estimated that online lottery games have brought the state a large jump in revenue. Year-end reports from 2018 saw lottery proceeds jump 20 percent to $86 million. The state attributes this to online lottery sales.
Several states allow a form of online gambling in the Northeast and the Eastern Seaboard. New Hampshire is one of six states that allow online lottery sales. The states that are suing the federal government are using the same argument that New Jersey used to successfully change the sports gambling law.
The states are arguing that under the U.S. Constitution, the federal government has no right to regulate their commerce. The U.S. Constitution states that the power to regulate international commerce belongs to the federal government. The federal government also has the right to regulate commerce between the states. However, the power to regulate commerce within a state is with each individual state. Last May, the Supreme Court agreed with New Jersey’s argument. It overturned a 26-year-old law and said states have the power to decide for themselves whether to allow sports gambling. Many expect this lawsuit will also end up in the Supreme Court.
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