New Hampshire Prevails Against DOJ in Wire Act Lawsuit

Updated: June 5th, 2019 by Haley Hintze

The state of New Hampshire has prevailed in its lawsuit against the United States Department of Justice (DOJ) over the legality of the Wire Act reversal opinion that the DOJ issued in November of 2018 that threatened to close the door on most forms of electronic communications related to gambling. New Hampshire’s interests involved its participation in multi-state lottery drawings, though another beneficiary of the ruling that included an order nullifying the 2018 DOJ reversal opinion, is also of utmost importance to regulated interstate online poker in the US.

New Hampshire filed its action against the DOJ in mid-February, and in subsequent actions filed a motion for summary judgment against the DOJ based on the reversal opinion’s erroneous and illegal stance. Presiding US District Court Judge Paul Barbadoro granted that motion yesterday, while simultaneously dismissing a countering claim by the DOJ that the state and its lottery agencies didn’t have standing to sue, because the DOJ itself was delaying its verdict on whether interstate lotteries violated its revised reading of what the old Wire Act entailed.

Judge Barbadoro didn’t fall for the shuck, very much in line with what he outlined here at BPR in a late-April update. The DOJ’s desire to pretend all forms of interstate online gambling activity are illegal, without having to provide substantive definitions, was always a losing argument. Attorneys for New Hampshire railed against the DOJ’s written-in-water standards, and that became an important footnote within Judge Barbadoro’s 63-page opinion.

As Barbadoro wrote: “At oral argument, NeoPollard suggested that a declaratory judgment may necessarily be universal in effect, because ‘the idea that the law means something for the New Hampshire Lottery Commission and something for NeoPollard and something different for somebody else is not the way the criminal law in this country works.'” The judge agreed in general terms with that assessment as part of his finding nullifying the DOJ’s reversal opinion, which was widely reported to have been created and funded by Las Vegas Sands, Inc. chairman and anti-online-gambling zealot Sheldon Adelson.

Judge Barbadoro wrote this as is conclusion:

“In summary, I deny the Government’s motion to dismiss for lack of jurisdiction because the plaintiffs have established standing, and the Government has not met its burden to show that the case is moot. I grant the plaintiffs’ motions for summary judgment  and deny the
Government’s cross-motion for summary judgment. I hereby declare that § 1084(a) of the Wire Act, 18 U.S.C. § 1084(a), applies only to transmissions related to bets or wagers on a sporting event or contest. The 2018 OLC Opinion is set aside.”

Just prior to that, the judge offered this, which might be taken as fair warning to the DOJ should that federal agency seek to appeal the matter to a higher court: “I have no reason to believe that the Government will fail to respect my ruling that the Wire Act is limited to sports gambling. The judgment provides the Lottery Commission and NeoPollard complete relief.”

Should the DOJ appeal, despite the specious reasoning of the reversal opinion that has now been voided in a US court, that effort would have to begin in the US First District Court of Appeals. Failing there, the DOJ could try for something such as an en banc review (rarely granted), or could then consider taking the matter to the US Supreme Court. That, too, would also be a longshot effort.

The nullifying of the reversal opinion means that the 1961 Wire Act will again be considered as applying only to sports betting. That’s great news for the first interstate online-poker offerings in the US, such as the World Series of Poker’s platform available in Nevada and New Jersey. Facing a DOJ-announced compliance deadline of June 17th, it appeared that New Jersey players were going to miss out on most of the 2019 WSOP’s online events. Yesterday’s ruling opens the door for the WSOP to allow New Jersey players to compete, though no formal announcement has been made as yet.

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