New Hampshire Lottery Sues DOJ Over Wire Act Opinion

In his first day on the job, US Attorney General William Barr is facing a federal lawsuit listing his name as the defendant.

The New Hampshire Lottery Commission has brought a civil suit against Barr and the US Department of Justice, seeking an injunction on the new Wire Act opinion. The agency lodged its complaint on Friday with the US District Court in New Hampshire.

Gov. Chris Sununu also released a brief press statement in tandem with the filing:

“Today New Hampshire is taking action to protect public education in New Hampshire. The opinion issued by DOJ puts millions of dollars of funding at risk, and we have a responsibility to stand up for our students.”

Earlier this week, New Jersey Senate President Stephen Sweeney threatened his own legal action on behalf of the NJ online gambling industry.

The NHLC also filed motions requesting both a speedy hearing and summary judgment alongside its complaint.

Full text of NH Lottery Commission v. William Barr

More on Wire Act lawsuit

The DOJ’s Office of Legal Counsel (OLC) last month reversed a 2011 opinion which had limited the scope of the 1961 Wire Act to sports betting. Several states, including New Hampshire, have crafted regulated gambling industries in the interim, working under that more-permissive interpretation.

The OLC’s sudden change of heart could affect all gambling conducted via the internet, including things like iLottery and online poker. It’s the former that has officials in New Hampshire so concerned. NH online lottery sales represent a significant source of state funding, generating nearly $45 million in revenue over the last fiscal year.

The NHLC suit argues that the new opinion infringes on both statutory language and legislative precedent.

To the extent the 2018 Opinion seeks only to enjoin the sale of lottery tickets directly over the internet, this action would be inconsistent with the prior actions of the New Hampshire Legislature, the United States Congress, federal court decisional law, and the prior opinion of the Department of Justice. The NHLC relied on each of these legal authorities in launching an iLottery platform.

According to the plaintiffs, the reinterpretation “is not faithful to the text, structure, purpose, or legislative history of the Wire Act. Further, the filing argues, it may be unconstitutional under the First Amendment.

Gaming law expert Anthony Cabot recently told Bonus that the DOJ would struggle to defend itself against such a lawsuit.

NH the perfect plaintiff?

From @WALLACHLEGAL on Twitter:

Those most familiar with the legality and the mechanics of the Wire Act are unsurprised to see this filing. Despite the noise out of New Jersey, a few even expected New Hampshire to make the first tangible move.3 reasons why I peg the New Hampshire Lottery as the ideal plaintiff for challenging the DoJ’s Wire Act reinterpretation: 1. It is an iLottery 2. Will likely be overseeing mobile sports betting next year 3. U.S. v. Lyons (CA1 case limiting reach of Wire Act to sports betting)

It’s the latter that may bode most favorably for the state’s chances. New Hampshire belongs to the First Circuit of US courts, which has previously upheld a literal reading of the law.

Heres the way the court applied some the Wire Act’s provisions to its decision in Lyons:

In this manner, the Wire Act prohibits interstate gambling without criminalizing lawful intrastate gambling or prohibiting the transmission of data needed to enable intrastate gambling on events held in other states if gambling in both states on such events is lawful.

More and more states pushing back

This filing in New Hampshire represents an escalation of the state-level pushback, which has grown louder in recent days.

Public gambling companies are similarly nonplussed by the new opinion. During an MGM earnings call this week, CEO Jim Murren argued that even Powerball would be illegal under a strict interpretation.

“It’s just, we think, an absurdly poorly written and unenforceable opinion,” Murren told investors.

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