The Department of Justice has managed to throw the entire gaming industry into turmoil with a single opinion. In the wake of all this commotion, here’s how Pennsylvania online poker will proceed in the coming months.
To recap, the DOJ issued an opinion on the Wire Act last Monday. The opinion reversed the agency’s previous position to say that the 1961 law against wagering across electronic wires pertains to all gambling, not just sports betting.
PA online poker sites will find a way to comply
Deputy attorney general Rod Rosenstein followed up the opinion with an announcement that businesses had 90 days to comply with the new interpretation. He said as much in a memorandum sent to various gaming commissions and boards, including the Pennsylvania Gaming Control Board (PGCB).
The PGCB, in turn, told its licensees that they have to comply with the Wire Act. To that end, the board is requiring the casinos to submit their plans for compliance within 30 days.
The good news is that compliance with the law isn’t a deathblow, necessarily. According to former Chief of the DOJ’s Organized Crime and Gang Section James Trusty, sites will be able to defend themselves against federal liability.
The trick will be the actual modes of transmission for the websites themselves. Operators will have to design their infrastructure specifically never to cross state lines.
So, operators will need to figure out a way to house servers in-state, if they weren’t already. Unfortunately, there may be an associated cost with having to do so. The change may involve more planning and delays, too.
The bottom line is that online poker will certainly exist in Pennsylvania. However, it may just feature a player pool with only Pennsylvanians in it — the multi-state compact seems unlikely to continue.
PA online poker fans need to wait and see
However, as we wrote last week, the DOJ is not a lawmaking organization. Its mission is the enforcement of existing law as best it sees fit.
What we don’t know is how the DOJ plans to execute this new position.
“(For those who are interested), waiting another week or two to see what kind of guidance they issue for federal prosecutors could be worth considering,” Trusty said, in an email.
So, it is possible that the DOJ will direct its prosecutors to place enforcement of the Wire Act at the top of their list. In that event, Pennsylvania’s entrance into the multi-state compact will be heavily in doubt. For that matter, the compact’s entire existence will be in question.
On the other hand, it’s possible that DOJ prosecutors will mostly look the other direction on this sort of thing. That outcome would be the best scenario and would likely allow online gambling to expand as before.
Adelson’s parting gift to PA is a knife in the back
If all this uproar seems unnecessary and unfair, PA residents can thank someone close to home. A Wall Street Journal article over the weekend noted that the opinion’s language closely followed language from lobbyists associated with casino mogul Sheldon Adelson.
Adelson, of course, owns the Sands Bethlehem. However, he is in the process of selling the property to the Poarch Creek Band of Indians and withdrawing his operations from the state.
The Sands Bethlehem is not cheap. As reported by PlayPennsylvania, the tribe plans to pay $1.3 billion for the property.
Part of the sale involves the inclusion of the Sands’ incipient online gaming license. One has to wonder how much the property is worth with all this extra hassle built into it. Nevertheless, Sands has been dutifully pursuing the licensure on the tribe’s behalf until the sale closes.
This latest development from the DOJ shows Pennsylvanians exactly how much Sands’ hearts were into it.