Legal Online Gaming Now in Question

The Department of Justice reverses the opinion of the 2011 Wire Act, reaffirming the illegality of online lotteries.

January 15, 2019

WASHINGTON – In a recently released opinion, the U.S. Department of Justice (DOJ) has reaffirmed a long-standing judicial understanding that all online gaming, including lotteries, are illegal under the Wire Act—a position NACS has been advocating for over the past seven years. The Wire Act was first signed into law in 1961 as part of an effort by the Justice Department led by then Attorney General Robert Kennedy to cut off the funding sources for organized crime in the United States.  The law was enacted to prevent the interstate phone and wire system from being used to transmit wagers and information used by illicit gambling operations.  In more modern times the law has been equally applied to the internet.

Just over seven years ago, in December 2011, the Office of Legal Council (OLC) within the Department of Justice issued an opinion contending that, due to the location of one comma in one sentence of the Wire Act, it only applied to sports betting.  The OLC produced that opinion in response to requests from some state lottery operators.  This wrongheaded decision reversed more than five decades of legal interpretation of the Wire Act’s reach. 

On Monday, responding to inquiries from members of Congress seeking further clarification on the Wire Act, the DOJ has finally reversed that 2011 decision and reaffirmed the precedent that the Wire Act explicitly prohibits all forms of gambling from taking place over the wire systems—phones and now internet.  

“NACS applauds the Department of Justice for reaffirming the rule of law in this area,” said NACS Director of Government Relations Jon Taets. “The Wire Act has always clearly prohibited online gaming, including lottery games. This decision simply corrects an error made in 2011 that should never have happened. We have always maintained that lotteries and their customers are best served by playing at brick and mortar retail locations where well-trained employees can enforce requirements, including age-verification laws.”