DOJ Dodges Lottery Question as New Hampshire Wire Act Lawsuit Continues

Updated: April 29th, 2019 by Haley Hintze

“We’ll get back to you on that one, and if and when we decide we want to declare your business illegal, well, that’s our decision to make whenever we feel the time is right.” That’s the gist of the argument that the US Department of Justice continues to offer in its defense of its odious reversal opinion of the 1961 Wire Act, which has resulted in the State of New Hampshire and its two state-run lottery entities suing the DOJ and seeking summary judgment declaring that reversal opinion unlawful.

New Hampshire filed its lawsuit just weeks after the reversal opinion, created in November and published in January, attempted to nullify the opinion researched and published by then US Attorney General Eric Holder that the US’s 1961 Wire Act applies only to sports betting and not to other forms of online gambling. New York and Illinois led several states in pushing Holder to research the question, since many states sought to sell lottery tickets online, but in declaring the limits of the Wire Act’s reach, it also opened the door for states to legalize and regulate other forms of online gambling that might pass information electronically over state lines, including any player-pooling deals between states.

It’s an all-or-nothing question in legal terms: either the Wire Act applies only to sports betting, or it applies to all forms of gambling in which the interstate transmission of gambling might occur. And that’s why New Hampshire had to sue; if it wasn’t that state doing so, another would have, and at least 15 other state have joined as amici (friends) in the lawsuit. Most of these states are part of vast multi-state lottery operations such as Powerball and Megabucks, and the selling of draws to these lottos online would necessary be in violation of the latest DOJ opinion.

Should the DOJ’s recent reversal be allowed to stand, it would have a chilling effect not only on the states and their lotteries, but all the third-party support services these US states might use. For decades, the US’s DOJ ruled by fear and intimidation on the issue, since the Wire Act was bad law along. Today’s Trump Administration DOJ, partnering in this battle with the Sheldon Adelson-funded Coalitin to Stop Internet Gambling (CSIG), desperately seeks to return to the old fear-and-intimidation nti-gambling tactics.

Case in point: In this lawsuit, oral arguments have already been held, and presiding US District Court Judge Paul Barbadoro had ordered the DOJ to file a supplemental memorandum as to whether the Wire Act applies to lotteries. The DOJ filed a supplemental memo on April 25, technically meeting a deadline issued by Judge Barbadoro, but in it, the DOJ again declines to answer the question, claiming that the matter is still under review.

Here’s an excerpt from the DOJ’s latest submission:

Plaintiffs [meaning New Hampshire and its lottery entities] have not pointed to a single Wire Act prosecution of a state lottery, or its employees or vendors, for the operation of a lottery authorized under state law, in the history of the statute. Defendants therefore respectfully maintain that the Court lacks jurisdiction to resolve at this time not only whether the Wire Act reaches beyond sports gambling generally, but also whether the Wire Act could ever be applied to state lotteries and their vendors or employees, as there is no present credible threat of prosecution.

Because there is no credible threat of prosecution, the Court should dismiss this case for lack of standing. The potential Wire Act liability of state agencies, employees, and vendors involves the evaluation of numerous complicated and important issues, and the Department intends to give these issues the deliberate consideration that they deserve. Nonetheless, to avoid any suggestion that the government has forfeited possible defenses in the context of this litigation, Defendants respectfully submit that the New Hampshire Lottery Commission fails to demonstrate its entitlement to a declaratory judgment at this time on the specific theories that it has advanced: that because it falls outside the statutory term “whoever,” neither it, nor its employees, nor its vendors, may be prosecuted under the Wire Act.… Defendants express no view at this time as to the viability of other potential theories that the Lottery Commission has not asserted.

The DOJ also continues to argue a special circumstance regarding the definition of the word “whoever”, which has long been held to apply to people, companies and groups, but never to governmental entities:

The Wire Act applies to “[w]hoever being engaged in the business of betting or wagering knowingly uses a wire communication facility” for certain prohibited purposes. Under the Dictionary Act, “unless the context indicates otherwise,” the terms “person” and “whoever” are defined to “include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.” … The Lottery Commission’s arguments fail to demonstrate that it, its employees, or its vendors fall outside the term in this context.

The DOJ (and its not-so-secret partner in this prosecutorial false, Sheldon Adelson) continues creating every garbage argument it can in an effort to deny the majority of US states the fruits of gambling-related activities — activities in many cases which have already been determined to be fully legal in court.

Comments are closed.