NH Lottery Sues to Blunt DOJ on Wire Act Opinion

NH Lottery Sues to Blunt DOJ on Wire Act Opinion

The New Hampshire Lottery on Friday filed civil suit against the Department of Justice over its recent reinterpretation of the Wire Act of 1961 asserting that the law applied to all forms of interstate gaming.

The suit, which names recently confirmed Attorney General William Barr as plaintiff, attempts to stop the DOJ from enforcing the opinion. A 2011 interpretation of the Wire Act, which was originally devised to curb interstate betting, asserted that the law did not apply to other forms of gambling. The new view would be detrimental to multiple forms of online gaming, including lotteries, whose commerce often crosses state borders.

In its filing, the New Hampshire Lottery seeks “declaratory and injunctive relief against the defendants." Legal observers believe the first legal challenge to the ruling came from that state, in part, because the First Circuit Court of Appeals has previously found that the Wire Act was applicable only to online sports betting.

The suit states: “Today New Hampshire is taking action to protect public education in New Hampshire. The opinion issued by DOJ puts millions of dollars of funding at risk, and we have a responsibility to stand up for our students.”

The complaint cites previous case law that supports the previous interpretation of the Wire Act, while noting “longstanding non-use of the Wire Act to prohibit state-run lottery activity, now subject the NHLC and its employees and agents to criminal liability and prosecution.”

Does New Hampshire Stand A Chance?

John Holden, a law professor at Oklahoma State University, told Gambling.com through an email that he believes the lawsuit is “premature” because 90-day compliance period that the Department of Justice decreed after announcing the new interpretation has not yet expired.

“Without action by the DOJ to enforce the new interpretation, this matter may not be constitutionally ripe,” Holden said in the email.

Attorney Daniel Wallach said in a string of tweets on the subject that New Hampshire is "poised for the win at the district court level" because of precedent in U.S. vs. Lyons.

A memo from Deputy Attorney General Rod Rosenstein released to the public on Jan. 16 stated:

“As an exercise of discretion, Department of Justice attorneys should refrain from applying Section 1084(a) in criminal or civil actions to persons who engaged in conduct violating the Wire Act in reliance on the 2011 OLC opinion prior to the date of this memorandum, and for 90 days thereafter. A 90-day window will give businesses that relied on the 2011 OLC opinion time to bring their operations into compliance with federal law. This is an internal exercise of prosecutorial discretion; it is not a safe harbor for violations of the Wire Act.”

The New Hampshire suit and the DOJ’s enforcement figure to be critical to a lottery industry that is a source of revenue in 42 states.

Sen. Graham Discussed Wire Act With Rosenstein

In a related story, The Intercept reported on Friday that Sen. Lindsey Graham (R-SC) spoke with Rosenstein “several times” about altering the DOJ’s 2011 interpretation.

Stricter regulation of online gaming has been a major focus of casino magnate Sheldon Adelson, a major Republican donor and financial backer of Graham.

“I’ve been pushing this from the day it came out under the Obama administration,” Graham told The Intercept. “Sen. [Dianne] Feinstein and myself have been asking for them to change this absurd interpretation because it leads to the Wild Wild West.”

Graham has sponsored the Restoration of America’s Wire Act - which would all but eliminate all forms of online gaming – in the Senate with support from Feinstein.

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