New Hampshire Lottery Aims Powerball at DOJ, Sues to Block Enforcement of Wire Act Opinion

Posted on: February 15, 2019, 11:10h. 

Last updated on: February 15, 2019, 11:10h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

The State of New Hampshire has made good on its threat earlier this week that it was ready to sue the Department of Justice over its reinterpretation of the Wire Act.

Wire Act
It’s the first day on the job for US Attorney General William Barr and he gets sued by the State of New Hampshire. Barr’s personal stance on online gambling and the Wire Act is unknown. (Kevin Lamarque/Reuters)

On Friday, the New Hampshire Lottery Commission (NHLC) filed suit against brand-new US Attorney General William Barr seeking declarative and injunctive relief against the DOJ — essentially a bid to halt enforcement of the new opinion.

The lawsuit comes on the same day that New Jersey also threatened legal action.

In January, the DOJ reversed an Obama-era opinion on the Wire Act to assert that it prohibits all forms of online gambling across state lines — not just sports wagering.

The earlier opinion has been sought in 2011 by the lottery commissions of Illinois and New York, which wanted to know whether their plans were legal to use the internet and out-of-state transaction processors to sell lottery tickets within their borders.

The resulting affirmative opinion paved the way for the launch of other forms of online gaming in New Jersey, Nevada, and Delaware, and later Pennsylvania.

Two ‘Clear and Binding’ Precedents

The rollback of the opinion — which is widely believed to have been a favor to Republican megadonor Sheldon Adelson — potentially jeopardizes everything from New Jerseys online casino sector to the non-profit Multi-State Lottery, which operates the Powerball lottery draw.

Earlier this week, New Hampshire Lottery Executive Director Charles McIntyre told The Union Leader that the “very narrowest interpretation,” could cost the state around $4 to $6 million this year and $6 million to $8 million next year — money that goes to funding education in the state.

But, as LegalSportsReport points out, the lawsuit was likely filed in New Hampshire with the support of the wider gaming industry because a precedent exists in the First Circuit Court of Appeals, which serves the New England region.

‘Contrary to Wire Act Text, Purpose, and History’

In 2014, the court referred to the Wire Act as a law that applies only to sports betting when it upheld the conviction of Todd Lyons, who worked as an agent for Antigua-based US-facing online sports book, Sports Off Shore.

More recently, the US Supreme Court made a similar assertion last May when it struck down PASPA, the federal ban on state-sanctioned sports betting.

These precedents are “clear and binding,” the asserts the NHLC lawsuit.

The effect of the 2008 opinion is to extend criminal liability under [the Wire Act] far beyond betting on sporting events or contests to include virtually any conceivable form of gambling, which could encompass state-conducted lotteries,” it adds.

“Such a construction of the statute is not faithful to the text, structure, purpose, or legislative history of the text.”

The DOJ opinion also “intrudes on the sovereign interests of the State of New Hampshire without unmistakably clear language that Congress intended such as result,” argues the lawsuit.

The filing comes a day after New Hampshire Governor Chris Sununu included revenue from a future sports betting market in his budget plan — a good sign that the state’s lawmakers expect to get the business of legalizing wagering done this year, and sooner rather than later.

The Republican governor believes sports betting will generate $10 million a year in new recurring revenue for the state.