The U.S. prohibition on interstate sports gambling will be widened to include online poker and other casino games under a Justice Department decision, experts said on Tuesday.
The department’s Office of Legal Counsel said in a November 2018 opinion, not released until late Monday, that a 1961 law called the Wire Act does in fact apply to interstate online poker and casino games, not just sports bets.
The Justice Department said on Tuesday it would delay implementation of the new restrictions for 90 days to allow businesses to adjust their operations.
The U.S. Supreme Court in May allowed states to legalize, regulate and tax sports wagers if they so chose. Under a previous opinion, the wire act was only applied to sports gambling, so that market has developed state by state, not across state lines like casino games.
The opinion “will have zero impact on the growth of mobile sports betting,” said Daniel Wallach, co-founding director of the sports wagering program at the University of New Hampshire School of Law.
However, it is likely to pose problems for states like New Jersey, Nevada and Delaware, which have an interstate compact for online poker that was created a few years ago – ironically, in the wake of a Justice Department opinion in 2011.
Gaming regulators in all three states did not immediately reply to requests for comment on Tuesday.
In that previous opinion, the department found that Wire Act prohibitions against interstate transmission of wagering-related information applied only to sports betting – but not casino games.
The small but growing online state lotteries and casino industries have revenues of a little under $500 million annually, said Chris Grove, a gambling industry strategist at Eilers & Krejcik.
But the newest opinion would not affect the biggest online gaming operations – those in offshore markets including Costa Rica and Antigua, Grove said.
The opinion “is sure to lead to legal challenges,” Wallach said. “The nod is to having judicial interpretation to resolve this issue.”
State lotteries that conduct online sales, gaming operators, states that have allowed interstate internet gambling, vendors and suppliers could all bring challenges.
“The list of prospective plaintiffs could be rather long,” Wallach said.
Daily fantasy sports also is unlikely to be adversely affected, he said.