Numerous States File to Support New Hampshire Wire Act Case
When the Department of Justice’s Office of Legal Counsel revealed its new opinion regarding the Wire Act in January, it was more than a little unpopular. It raised eyebrows due to the likely influence of casino mogul and political influencer Sheldon Adelson on the decision, and it infuriated states that used the previous DOJ decision of 2011 to implement laws establishing online lotteries, poker, and gambling.
The new decision, which was actually issued in November 2018 but not made public until January, reversed the 2011 decision that issued a modern interpretation of the 1961 Wire Act to apply only to sports betting. This put other forms of internet gambling in the hands of the states. But after seven years of states acting upon that opinion, the DOJ decided to overturn it.
It did not sit well.
And it did not sit for long. In less than a month, New Hampshire stepped up to the plate as the first to file a lawsuit against the Department of Justice and new US Attorney General William Barr. That suit came from the New Hampshire Lottery Commission, which was quickly joined by NeoPollard Interactive, the online lottery platform provider for the state’s online lottery games.
Numerous others have joined in the weeks since.
Not long after, iDEA Growth filed its own challenge against the DOJ, Barr, and the United States of America. Filed by Ifrah Law, the lobbying organization made the move on behalf of the internet gaming and entertainment industry it represents, which consists of nearly two dozen companies.
Along with the filing was a Motion to Intervene, which proposed that its suit be folded into the ones from the New Hampshire Lottery Commission and NeoPollard. As noted in the press information released with the court filing, the hope was that the lawsuits would be combined by the end of February. However, the motion was ultimately denied, and iDEA Growth filed an Amicus brief instead.
Also in under the wire (no pun intended) is the amicus brief filed by @iDEA_Growth in support of the @NHLottery. The DoJ’s responses (which will likely include a cross-motion to dismiss or MSJ, as opposed to an answer) are due on March 22nd.
— Daniel Wallach (@WALLACHLEGAL) March 9, 2019
Amicus Briefs Galore
On March 8, the state of New Jersey filed a Brief of Amicus Curiae “in support of plaintiff’s motions for summary judgment” in the New Hampshire case.
The preliminary statement asks the court to declare the latest Wire Act opinion unlawful.
“New Jersey seeks to participate in this matter because, in addition to having invested a lottery like New Hampshire has done, New Jersey has also developed a thriving non-sports-related legal internet gaming industry (‘iGaming’) in response to the DOJ’s 2011 express authorization of such internet gambling. This burgeoning iGaming industry annually yields hundreds of millions of dollars in private revenue and tens of millions of dollars to New Jersey’s economy in state taxes and fees. Absent judicial intervention, this iGaming industry may be forced to shut down and those revenues will disappear.”
The following Monday, the Michigan Bureau of State Lottery joined in by filing its own Memorandum of Law of Amicus. The purpose is to provide additional perspective on the “erroneous nature” of the recent DOJ decision and the impact it may have on 47 jurisdictions nationwide.
“The Michigan Lottery hereby represents that the Kentucky Lottery Corporation, the Tennessee Education Lottery Corporation, the Virginia Lottery, the Rhode Island Lottery, the Colorado State Lottery Division, the North Carolina Education Lottery, the State of Delaware, the State of Idaho, the State of Vermont, the State of Mississippi, the State of Alaska, and the District of Columbia all support this motion and the requested relief.”
The document goes on to assert that the 47 government-operated lotteries nationwide exceeded $80 billion in the 2017 fiscal year, which was allocated for educational, environmental, and social needs. The new Wire Act decision puts that revenue at risk. It goes on to assert that the interest in the case is threefold:
–1. Each lottery and state supporting the Amicus (except Alaska and Mississippi) has entered into at least one multi-jurisdictional agreement with the New Hampshire Lottery Commission for lottery games like Mega Millions and Powerball.
–2. Lotteries have contracted with various vendors, such as NeoPollard, to provide services that may be impacted by the DOJ opinion.
–3. Lotteries must now choose between losing millions of dollars in funding for vital public services or facing criminal liability.
With so many intervening parties in New Hampshire, perhaps the @NHLottery’s lawsuit against the DoJ should be renamed “Everybody loves Lyons.” Makes no sense to sue in your own circuit when you can just chase precedent in other circuits and ask for a nationwide injunction.
— Daniel Wallach (@WALLACHLEGAL) March 9, 2019
Pennsylvania Participation Limited
The state of Pennsylvania was ready to participate in the lawsuit frenzy as well, but the Commonwealth of Pennsylvania and Pennsylvania Lottery wanted to be co-plaintiffs in the case, alongside New Hampshire. Since Pennsylvania does offer online lottery sales and will be launching other forms of online gambling this year, the state has a vested interest in the case and the final interpretation of the Wire Act.
However, Judge Paul Barbadoro of the US District Court for the District of New Hampshire denied the request. It happened rather quickly, with the following order:
“I categorically reject the proposed intervenor’s contention that it is entitled to intervene as a right in this case simply because an adverse ruling could affect the lawfulness of its state statutes under certain circumstances.”
Even so, Barbadoro did welcome an Amicus filing in the case, which Pennsylvania may be in the process of filing this week.
PA was looking for a lead turn in the DOJ Wire Act suit, but instead ended up with a supporting role https://t.co/ym8zdhSMfK
— PlayPennsylvania (@PlayPANews) March 11, 2019
Nothing Yet from Nevada
There is no online lottery in Nevada, and online poker is its only form of internet gambling. However, it was the first state to launch online poker and has a vested interest in seeing the games continue, especially on the interstate level.
But Nevada has decided to watch what happens.
CDC Gaming Reports spoke to a representative of the Nevada Gaming Control Board, who said that the situation is being monitored. “The board and the Attorney General’s office have been in consistent communication with other interested parties, including states and licensees.”
Further, a spokesperson for Nevada Attorney General Aaron Ford’s office said, “While Nevada has a great interest in the outcome of the pending litigation, our state-specific interests are distinctive from others with primary lottery interests. As we continue to evaluate this matter in consultation with the Gaming Control Board and the Governor’s office, we will do so with the unique needs and interests of Nevada in mind.”