Attorney General nominee Jeff Sessions appeared in front of the Senate Judiciary Committee on Monday for a confirmation hearing and some of his words have sent iGaming supporters into a frenzy.
Sessions told the committee that he was shocked over a December 2011 Department of Justice memo that paved the way for state-level iGaming regulation.
While he didn't say he would overturn the memo, many believe that's the inevitable conclusion.
Sessions Promises to Revisit Wire Act Memo
During the hearing on Monday, South Carolina Senator Lindsey Graham asked Sessions about the 2011 DOJ memo that declared that the Wire Act only applied to sports betting.
Sessions told Graham that he was shocked by the memo and told the committee that he would revisit the memo provided he is confirmed.
Sessions has opposed the memo in the past but during the hearing said that he needs to study the matter before he formulates an official opinion.
Many iGaming supporters are assuming that this means that Sessions has already formulated that opinion and will likely strike down that memo.
What Happens if the DOJ Memo is Nullified?
Should Sessions get confirmed and indeed strike down the DOJ memo, what happens to the regulated iGaming and online poker market?
Well, that depends on how it's done. Some believe that exceptions will have to be made for the states that have already legalized online gambling in one form or another.
Presently, there are three states that offer legal online poker, four that sell online lottery tickets and nine states have regulated Daily Fantasy Sports.
Most assume, and we would agree, that reversing the DOJ memo without providing exceptions for those states would result in a legal challenge from those states. Basically it would be a court battle over states rights and one that could drag out for years.
Beyond that, unless a Federal court or the Supreme Court was to rule that the reversal of the memo was unconstitutional, it would effectively kill any future for the U.S. and California online poker market - at least for now.
Reversal is Not Guaranteed
One last thing that needs to be pointed out is that a reversal of the DOJ memo is by no means guaranteed if Sessions comes into office.
Sessions could review the matter and determine that a more suitable course would be to do nothing and leave it up to Congress to try to institute RAWA or some other legislation that could produce the same effect but in a way that would stand a legal challenge.
At this time, we urge a wait and see approach to this issue as it could go either way. This isn't a case such as past RAWA bills where there's virtually no chance of anything developing.
This is a real and present danger to the online poker market but one that likely will not develop immediately. However, if talk of Sessions reversing the DOJ memo begins to take steam, it could impact the U.S. iGaming market - even if he fails to act.
States currently considering the matter could decide to hold off in passing new laws with the concerns that iGaming could be struck down later. Regardless, this is a story that we all should pay attention to over the next few months and throughout 2017.