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.
Continue reading New Hampshire Federal Judge Rules Wire Act Only Applies to Sports Betting – Now What?
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
On January 14, 2019, the U.S. Department of Justice published a legal opinion that may restrict online gambling. The opinion, dated November 2, 2018, (although only now published) reconsidered the DOJ’s 2011 opinion that declared the Wire Act (18 U.S.C. § 1084) only applied to sports gambling. After the release of the 2011 opinion, several states, including New Jersey, Delaware and Pennsylvania, launched or moved forward with intrastate online lottery, casino gaming and poker. The new opinion, however, somewhat clouds the landscape regarding these operations. Online gaming businesses would be well advised to quickly determine whether their operations comply with the DOJ’s new reading.
The reconsideration stems from one phrase in the Wire Act: “on any sporting event or contest.” In 2011, the DOJ opined that the Wire Act was ambiguous and “that the more logical result” was that the phrase “on any sporting event or contest” applied to the entirety of the Wire Act, thereby prohibiting only the transmission of “bets or wagers” or “information assisting in the placing of bets or wagers” across state lines, if the bet or wager were on a sporting event. This logic follows in part from the Act’s legislative history, which reveals that Congress’ overriding goal in passing the Wire Act was to stop the use of wire communications by organized crime for illegal sports gambling. In 2018, the Supreme Court of the United States, in Murphy v. Nat’l Collegiate Athletic Ass’n—a decision that paved the way for states to authorize sports betting, in dicta—noted Congress’ original intent in characterizing a general federal approach to gambling: Operating a gambling business violates federal law only if that conduct is illegal under state or local law.
Read the full Duane Morris Alert.