United States: Universities And Sports Betting: The Impact Of The January 2019 DOJ Memorandum In Light Of Murphy v. NCAA

Last Updated: May 30 2019
Article by Randall P. Hsia

The federal rules for sports betting have been radically changed and then left in disarray. First, the Supreme Court's Murphy decision in May 2018 ceded regulation of sports gambling to the individual states. Then, the Department of Justice's ("DOJ") memorandum opinion in January 2019 prohibited any form of interstate gambling that uses a wire communication, expanding the reach of the Wire Act beyond sports-related gambling. Pending legal challenges to the DOJ opinion now further muddy the waters. How are universities, businesses, and other organizations to best navigate in this turbulent legal environment?


On January 14, 2019, the DOJ's Office of Legal Counsel ("OLC") released a memorandum opinion regarding the applicability of the Wire Act, 18 U.S.C. § 1084, to non-sports betting. Under that opinion, DOJ interpreted the Wire Act to apply to any form of gambling that (1) uses a wire communication and (2) crosses state lines. The opinion is an about-face from the OLC's previous opinion issued in 2011, which limited application of the Wire Act to sports-related gambling. In contrast, the 2019 opinion significantly expands the reach of the Wire Act beyond the realm of sports wagering, and calls into question the legality of online casinos, internet lotteries, and other internet and wire-based gambling activities that cross state lines. In response to the 2019 OLC memorandum, the New Hampshire Lottery Commission ("NHLC") has filed suit against DOJ in federal court in an effort to prevent DOJ from enforcing the Wire Act against internet and wire-based lotteries.

The OLC memorandum is particularly surprising in light of the previous trend by both DOJ and the courts toward easing restrictions on gambling. By advising prosecutors that the Wire Act was limited to sports-related gambling, the 2011 OLC memorandum essentially left regulation of intrastate online casinos, internet lotteries, and other internet and wire-based gambling activities (that are not related to sports-gambling) to the individual states. In reliance on that opinion, a number of states, including Pennsylvania, Delaware, and New Jersey enacted legislation aimed at legalizing internet and other wire-based gambling. Although some district courts have held to the contrary, the 2011 OLC opinion is in line with decisions by the First and Fifth Circuit Courts of Appeals limiting the proscriptions of the Wire Act to bets and wagers placed on sporting events and contests (U.S. v. Lyons and In Re: MasterCard International Inc. Internet Gambling Litigation, respectively).

The Supreme Court continued this trend toward less restrictive regulations in its May 14, 2018 decision in Murphy v. National Collegiate Athletic Association. Murphy opened the door for individual states to legalize sports gambling by holding that the Professional and Amateur Sports Protection Act ("PASPA") violated the 10th Amendment which reserves to the states powers not delegated by the Constitution to the federal government. The Supreme Court held that PASPA, which was enacted in 1992, improperly commandeered power from the states to regulate their own gambling industries, by making it unlawful for a state to "sponsor, operate, advertise, or promote, betting on competitive sports events." As a direct result of the Murphy decision, numerous states introduced legislation to legalize sports gambling.

Impact of 2019 OLC Memorandum

In stark contrast to the 2011 opinion and the decisions by the First and Fifth Circuits, the 2019 OLC memorandum reverts back to the DOJ's pre-2011 position – that the Wire Act's prohibitions include all manner of gambling, and are not limited exclusively to sports betting. Under this revised guidance, a gambling business is prohibited from knowingly using a wire communication facility to: (1) transmit bets or wagers; (2) transmit information assisting in the placing of bets or wagers on any sporting event or contest; (3) receive money or credit as a result of bets or wagers; or (4) receive money or credit for information assisting in the placing of bets or wagers – where such communication is transmitted in interstate or foreign commerce.

Under the recent memorandum, only the second provision – the prohibition against "transmitting information assisting in the placing of bets or wagers on any sporting event or contest" – is limited to sports-related gambling. The remaining activities criminalized by the Wire Act apply equally to all types of gambling.

On January 15, 2019, Deputy Attorney General Rod J. Rosenstein, recognizing that many gambling businesses have likely fashioned their operations to comport with the 2011 OLC opinion, issued a memorandum that provides a 90-day grace period to allow businesses that have operated in reliance on OLC's 2011 opinion to modify their operations before prosecutors began expanded enforcement of the Wire Act. In April, DOJ subsequently issued guidance that directed prosecutors to further refrain from enforcement of the Wire Act against online and internet gambling activities until June 14, 2019, pending consideration of the issues raised in the New Hampshire Lottery Commission's lawsuit. The lawsuit has been joined by several states including Pennsylvania, New Jersey, and Michigan. At the same time, DOJ has moved to dismiss the suit, alleging that the NHLC lacks standing because the Wire Act does not apply to the activities of state lotteries or their vendors. The outcome of this litigation will likely not be clear until later this year.

Considerations for Affected Organizations

The 2019 OLC memorandum raises a host of potential issues for businesses engaged in and universities and other organizations impacted by sports gambling operations. At this point, universities in Pennsylvania should continue to plan for the impact of sports betting, both online and on-site in casinos in the state. Betting is likely to carry on within the Commonwealth for state-regulated operations, at least until the dust settles from the January memorandum. Although the four points below indicate potential complications for the roll out of sports betting in Pennsylvania, it is unlikely that the state-based industry will be completely thwarted.

Here are four areas of possible complications and fallout from the January OLC memorandum:

First, despite the Supreme Court's decision in Murphy to strike down PASPA and the resulting expansion of intrastate sports gambling operations, the Wire Act nonetheless continues to prohibit sports gambling operations that operate interstate, or between a state and a foreign country. The crux of the 2019 opinion is that this proscription has now been expanded to include non-sports gambling. This point by itself should not stop state-regulated in-state sports betting in Pennsylvania.

Second, although the Murphy decision included a discussion of a "safe harbor" provision under the Wire Act for "information assisting in the placing of bets or wagers" where such information (as opposed to actual bets or wagers) is sent from a state in which sports gambling is legal to another state or foreign country that has also legalized sports gambling, such a "safe harbor" does not protect non-sports related gambling. Furthermore, it is unclear how the safe harbor language squares with the plain-language of the Wire Act, which prohibits interstate transmission of such information, regardless of whether the state from which the information was sent, or the state in which it is received, deems such activity to be legal. Although this point may complicate the operations of sports betting businesses licensed in Pennsylvania, the ultimate impact on bettors may be minimal.

Third, it is also uncertain what, if any, impact the Wire Act will have on the transmission of intrastate sports bets or wagers, where the electronic information may be temporarily routed outside of that state, in what's known as "intermediate routing." Gambling businesses cannot assume that their operations will not run afoul of the Wire Act simply because the person placing the bet and the business processing the bet are located in the same state. Similar to the prior point, this factor may have more impact on behind-the-scenes business operations than on bettors.

Fourth, the OLC's revised memorandum opinion will undoubtedly cause banks and payment processors that are an essential component of many online sports-betting operations to tread carefully when considering their involvement in such operations. Universities involved with banks in credit card agreements for students may want to pay special attention to this point. In addition, this issue could create more direct problems for bettors, if they are eventually forced to use cash in person for gambling transactions.


The Murphy decision opened up a plethora of opportunities and challenges for universities related to sports gambling. In the end, whether, and to what extent the 2019 OLC opinion affects sports betting businesses, and in turn, how that impacts universities, their employees, student-athletes, and student bodies-at-large, remains to be seen.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions