In a decision released today by the Supreme Court, Appellate Division (New York’s intermediate appellate court) in White v. Cuomo, the Appellate Division concluded that New York’s daily fantasy sports authorization law is unconstitutional because DFS meets the definition of gambling under New York law. As a result, according to the Court, a constitutional amendment would be required in order to authorize a form of gambling. The 4-1 decision will in all likelihood be appealed to New York’s Court of Appeals, and it is likely that the decision will be stayed and have no immediate effect. The long range consequences for DFS in New York, though, are far less certain.
On September 24, 2019, the Third Circuit Court of Appeals found in favor of the New Jersey Thoroughbred Horsemen’s Association (“NJTHA”) and ruled that the NJTHA is entitled to recover the bond it posted as the result of a temporary restraining order (“TRO”) and subsequent preliminary injunction against the NJTHA in the 2014 case, National Collegiate Athletic Association v. Christie. The issue of recovering posted bond was a matter of first impression in the Third Circuit. The majority opinion, written by the Honorable Marjorie Rendell, concluded “wrongfully enjoined” under Federal Rule of Civil Procedure 65(c) can only be determined after a final judgment on the merits. Moreover, the court found a party is “wrongfully enjoined” when the final judgment concludes that party had a right all along to do what it was enjoined from doing. Also, in accordance with the majority of other circuits, the court found there is a rebuttable presumption that a wrongfully enjoined party is entitled to recover damages up to the bond amount.
Samantha L. Haggerty practices in the areas of litigation and gaming law. Ms. Haggerty has represented gaming industry clients in the licensing and regulatory process, including online gaming and sports betting clients. She has assisted with internal investigations of gaming companies and advising clients with respect to compliance and control enhancements. She contributes regularly to the Duane Morris LLP Gaming Law Blog and serves as secretary to the New Jersey State Bar Association’s Casino Law Section.
On June 3, 2019, Judge Paul Barbadoro for the District of New Hampshire concluded in a 63-page Memorandum Opinion that the purview of the Wire Act is limited to sports wagering. The effect of the Court’s opinion, however, may be limited in states other than New Hampshire.
After determining that the plaintiffs in the case, the New Hampshire Lottery Commission and NeoPollard Interactive LLC, new Hampshire’s iLottery vendor, have standing to challenge the DOJ’s 2018 Wire Act Opinion because they have established a threat of imminent injury, the Court addresses whether the Wire Act applies beyond sports wagering.
The legal landscape of the Wire Act continues to develop as the DOJ takes a step back from its updated Wire Act stance published earlier this year.
On January 15, 2019, the Department of Justice’s Office of Legal Counsel published a legal opinion that left the future of internet gaming in a state of uncertainty due to its conclusion that the transmission of any bet or wager – not just those on a sporting event or contest – across state lines, violates the Wire Act. The 2019 Opinion reflects a change in the DOJ’s position since 2011, where in an opinion it concluded that the Wire Act only applied to sports gambling. As a result of the 2011 Opinion, several states launched or moved forward with intrastate online lottery, casino gaming and poker.
The DOJ is currently refraining from prosecuting violations of the Wire Act in reliance on the 2011 Opinion until June 14, 2019. Following the release of the 2019 Opinion, however, the New Hampshire Lottery Commission initiated litigation against the DOJ in the United States District Court for the District of New Hampshire, challenging the legality of the 2011 Opinion. Various non-parties have filed amicus briefs in the case, including the State of New Jersey.
On April 8, 2019, the DOJ filed a declaration in the litigation, which includes as an exhibit a memorandum entitled “Notice Regarding the Applicability of the Wire Act, 18 U.S.C. [Section] 1084, to State Lotteries and their Vendors,” from Deputy Attorney General Rod Rosenstein. Continue reading State Lotteries Can Breathe a Sigh of Relief — For Now
Yesterday, the District Court for the Middle District of Pennsylvania struck down Section 1513 of the Pennsylvania Gaming Act, 4 Pa. C.S. § 1513, as unconstitutional under the United States Constitution. Section 1513 prohibits gaming license applicants, licensees, and principals of licensees from making any political contributions. Judge Sylvia H. Rambo of the Middle District applied the modified intermediate scrutiny analysis applicable to restrictions on direct campaign contributions under the First Amendment to determine that, although Pennsylvania demonstrated a sufficiently important interest in preventing quid pro quo corruption or the appearance of such corruption, the Commonwealth failed to craft legislation that was closely drawn to achieve that important interest. Continue reading Federal Court Strikes Down Pennsylvania’s Ban on Political Contributions from Casino Interests
Duane Morris LLP will present “Gaming in New York and Beyond – Looking to the Future,” to be held on Wednesday, August 15, 2018 at the firm’s New York office.
In the wake of the recent U.S. Supreme Court decision overturning the Professional and Amateur Sports Protection Act (PASPA), states now have the ability to legalize and regulate sports betting. Duane Morris has assembled a panel of gaming industry veterans and lawyers to help you understand the opportunities and challenges in this new era of gaming in New York and beyond. Partner Christopher Soriano and associates Adam Berger and Samantha Haggerty will be panelists.
For more information or to register, please visit the event page on the Duane Morris website.