New Hampshire

DOJ Tries to Shuck New Hampshire Wire Act Lawsuit in Latest Filing

There’s more news from the legal battle pitting the State of New Hampshire and the state’s lottery entities against the US Department of Justice (DOJ) and its controversial revised opinion on the applicability of the 1961 to online gambling activities other than sports betting.

In the latest defense memorandum filed by the DOJ, prosecuting attorney Steven A. Meyers has declared that the Wire Act as re-opinioned formally in January may or may even apply to state-run lotteries, particularly multistate offerings such as Powerball and Megabucks. States offering these lotteries and online sales of in-state products were the impetus behind the 2011 opinion on the Wire Act’s reach by then-US Attorney General Eric Holder that declared the Wire Act applied only to sports betting. However, because it was an all-or-nothing question, the de facto impact of Holder’s opinion opened the door for formally regulated online gambling across the US as well.

However, under the Trump Administration and under the crony-capitalism, purchased-law influence of anti-gambling foe Sheldon Adelson, the DOJ attempted to roll back that 2011 opinion and was quickly sued by New Hampshire, with 15 other pro-gambling states joining as amici (“friends”) in the challenge to the DOJ’s recent reversal. This filing, though, does little to clarify the DOJ’s true intent, other than to try to cripple New Hampshire’s formal legal challenge and perhaps get the lawsuit tossed out as moot.

That seems unlikely, though, given the content within this latest defense filing. Meyers wrote:

On January 15, 2019, I issued a memorandum titled “Applicability of the Wire Act, 18 U.S.C. § 1084, to Non-Sports Gambling,” directing you to refrain from applying Section 1084(a) in criminal or civil actions to persons who engaged in conduct violating the Wire Act in reliance on the 2011 opinion of the Office of Legal Counsel (OLC), and for 90 days after the publication of OLC’s revised 2018 opinion. My memorandum of February 28, 2019, extended the window until June 14 ,2019.

The OLC opinion did not address whether the Wire Act applies to State lotteries and their vendors. The Department is now reviewing that question. Department of Justice attorneys should refrain from applying Section I 084(a) to State lotteries and their vendors, if they are operating as authorized by State law, until the Department concludes its review. If the Department determines that the Wire Act does apply to State lotteries or their vendors, then Department of Justice attorneys should extend the forbearance period for 90 days after the Department publicly announces this position. This would allow State lotteries and their vendors a reasonable time to conform their operations to federal law.

The filing also included two memos from the original 1961 Congressional debate on the Wire Act as it moved toward becoming law, but such memos should have zero legal impact; the two memos of course were cherry-picked by Meyers and the DOJ to support their contentions.

The larger impact, of course, is a pseudo-legal attempt to shift the chilling intent of the DOJ’s reversal opinion away from the lotteries run by most US states and on to Las Vegas Sands, Inc. CEO Adelson’s real target, the slow spread of regulated online gambling across the US. In that push, this latest gambit appears unlike to succeed but it does raise a few legal points.

First, will the New Hampshire lawsuit be dismissed as moot or unripe? That seems to be part of the DOJ’s goal here, as it’s attempting to continue that chilling effect against selected targets while evading entirely the legality or constitutionality of the revised Wire Act opinion. Second, assuming the case isn’t dismissed, it would be foolhardy of New Hampshire to drop the matter based on the DOJ’s promise that it’s just going to keep looking at the matter. The word “lottery” does not appear anywhere in the 1961 Wire Act and no matter how hard Adelson and his purchased DOJ help might want it so, the word can’t be pasted in.

However, as a final soft warning for New Hampshire, it’s worth noting that Nevada is one of the very few US states without lottery offerings. The reason for that, in significant part, is also Adelson. Even though his primary target is online gambling here, he’d really like to destroy any and all forms of competition to his own land-based casinos, wherever and however it can be done.

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