Department of Justice Appeals New Hampshire Wire Act Ruling
On Friday, the U.S. Department of Justice filed a notice of appeal for the Wire Act decision from June in New Hampshire.
In a totally expected move by the William Barr-headed DOJ, it placed the appeal after the U.S. District Court for the District of New Hampshire ruled in favor of the New Hampshire Lottery Commission regarding an interpretation of the Wire Act of 1961.
In layman's terms, the Wire Act bans certain types of betting business. New Hampshire, backing up a previous Justice Department decision, ruled that the Wire Act only applies to sports betting.
What Effect will the Appeal Have?
The June 3 ruling by Judge Paul Barbadoro made it clear that the Wire Act only applies to sports betting options and not to the sale of lottery tickets, casino or gambling games which includes the likes of online poker.
Next Monday was the deadline for the government to file this appeal and clearly it was something they wanted to get done early.
Jeff Ifrah, founder of iDEA Growth (a trade group covering several facets of the American gaming industry) had some harsh words for the DOJ's action even though it was widely expected by most major figures in the industry.
In a press release Ifrah called for the DOJ to refocus its efforts toward the original targets of the Wire Act: Illegal bookmakers.
"The Department's action, while hardly unexpected, is certainly unwarranted," Ifrah said. "DOJ generally files appeals of adverse district court decisions as a matter of course. We hope that, rather than engaging in a protracted, expensive and ultimately unsuccessful legal fight, the Department will take this opportunity to negotiate a settlement which will focus the Wire Act and DOJ's enforcement resources on the right targets – the unlicensed illegal offshore Internet gambling operators who do not create jobs or tax revenue in the U.S. and do not appropriately protect consumers.”
Wire Act Interpretations Remain Enigmatic
The Wire Act came into place originally nearly 60 years ago to get to the bottom of the growing illegal bookmaking market. With that being said, there have been some confusing interpretations from the last decade regarding the changes to the law. That law, of course, was written decades before the internet and computers raised a whole new set of questions.
The Wire Act states that "whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication, which entitles the recipient to receive money or credit as a result of bets and wagers, or for information assisting in the placing of bets and wagers, shall be fined under this title or imprisoned not more than two years, or both."
In September 2011, the DOJ came out with a Memorandum Opinion that stated that "interstate transmissions of wire communications that do not relate to a 'sporting event or contest' fall outside of the reach of the Wire Act,” the release said.
Last November, the DOJ released a different interpretation that all of it applied to every type gambling which then flipped the DOJ’s previous explanation which disregarded judicial precedent.
The New Hampshire Lottery challenged that interpretation in the First District Court of New Hampshire and Barbadoro ruled in the lottery's favor. This is a true battle between the DOJ and the state of New Hampshire.
It's one the entire gaming industry will be watching.
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