DOJ Files Motion to Dismiss New Hampshire Challenge to Wire Act Opinion

Posted on: March 25, 2019, 10:07h. 

Last updated on: March 25, 2019, 10:07h.

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

On Friday, the US Department of Justice filed a motion dismiss a lawsuit brought by the New Hampshire Lottery that challenges its new Wire Act opinion.

Wire Act
US AG William Barr may have had his hands full with the Mueller Report, but a motion to dismiss the New Hampshire lawsuit suggests he fully supports the new interpretation of the Wire Act. (Image: CNN)

In January, the DOJ’s Office of Legal Counsel published the updated opinion of the 1961 federal Wire Act — which deals with intrastate gambling — stating the act’s prohibitions were “not uniformly limited to gambling on sporting events or contests,” in doing so jeopardizing online lottery and gaming operations across the United States.

New Jersey and Pennsylvania’s attorneys general have suggested criminal charges could be brought against operators “even where the interstate transmission of information is merely incidental to betting that is otherwise entirely lawful under state law.”

The opinion was released during an interim period at the DOJ, when Acting US Attorney General Matthew Whittaker was in charge, before the new Attorney General William Barr took office.

DOJ Won’t Lie Down

Many have suggested the timing was suspicious and that the new opinion may have been a political favor for LVS chairman Sheldon Adelson, a Republican megadonor and longstanding opponent of regulated online gaming.

Barr’s own feelings about the Wire Act and its new interpretation are unknown, although he is a strong states’ right advocate. But any suggestion that he is prepared to let online gaming off the hook — or that the DOJ would back down in the face of legal challenges — has been blown out of the water by its 32-page motion to dismiss.

Fifteen states have filed amicus briefs in support of the New Hampshire lawsuit, which seeks an injunction to stop the enforcement of the Wire Act opinion. New Hampshire has become the stage of the fightback because a precedent exists in the First Circuit Court of Appeals, which serves New England, that refers to the Wire Act as a law that prohibits online sports betting only.

Case ‘Lacks Standing’

The New Hampshire lawsuit states: “The effect of the 2018 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.

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

The DOJ claims it is, and that the New Hampshire suit “lacks standing” and fails “to identify a credible threat of prosecution.”

This suggests the DOJ believes states should first wait to be prosecuted — and potentially face losing millions revenues — before challenging its opinion, which is not something they are prepared to do.