Wire Act Case Court of Appeals Briefs Due in Two Weeks
The time is approaching for case #19-1835 to get underway in the United States Court of Appeals for the First Circuit. Briefs are due in two weeks, and the public may soon get a glimpse at the case and how it will proceed over the coming months.
Where It All Began
This case, of course, involves the Federal Wire Act of 1961, the law enacted at the behest of US Attorney General Robert F. Kennedy to stop organized crime factions from bookmaking across state lines.
Said law has since been applied to all types of interstate gambling, most specifically online gambling. The US Department of Justice in 2011 issued a memo to clarify the Wire Act so it would not be used on any type of gambling except sports betting.
Enter the Trump Administration in 2016 and one of its top donors and anti-online gambling fanatic, Sheldon Adelson. He used his connections at the DOJ to encourage a new DOJ opinion in late 2018, one that declared that the Wire Act was not “uniformly limited to gambling on sports events or contests.”
When that opinion became public in January 2019, the legal challenges began. The one that stood out and took the burden of fighting the DOJ opinion all the way was initiated by the New Hampshire Lottery Corporation and its online lottery provider NeoPollard.
Round 1: Win for Online Gambling
On June 3, 2019, the New Hampshire Lottery and NeoPollard claimed their first victory.
In the US District Court for the District of New Hampshire, Judge Paul Barbadoro set aside the most recent DOJ interpretation of the Wire Act. He ruled that the Wire Act does, in fact, apply only to sports betting, and state lotteries and other types of online gambling remain unaffected.
Barbadoro released his ruling in a 63-page document with many nuances related to the case. But ultimately, he wrote, “The proper remedy is to ‘set aside’ the 2018 OLC opinion.”
Round 2: DOJ Challenges Ruling
More than two months after the US District Court ruling, the US DOJ and Attorney General William Barr filed an appeal…on the very last day they could do so.
DOJ is (not surprisingly) appealing the NH Wire Act case https://t.co/t8mBOuZrHO
— Steve Ruddock (@SteveRuddock) August 16, 2019
At the beginning of October, the US Court of Appeals for the First Circuit set out a schedule for briefings. The appellant (Barr and DOJ) were given until November 12 to file their brief. From that point, the appellees will have 30 days to file a brief in response. The appellant then receives 21 days for a response.
If all parties adhere to deadlines and take no exceptions for holidays, this puts the final brief in the hands of the Appeals Court by January 2. With a consideration for the holiday season, all briefs should still be submitted before the end of January.
In the past week, the docket has shown several notices of appearance for attorneys on the NH Lottery side of the case, specifically for attorneys affiliated with the Commonwealth of Pennsylvania and the iDevelopment and Economic Association (iDEA).
Earlier in October, the annual Global Gaming Expo (G2E) took place in Las Vegas. Some of the seminars and discussion groups included in the conference focused on the Wire Act case and potential outcomes.
US Bets reported that most people offered a “cautiously positive” message with regard to the case.
Matthew McGill, an attorney who represents the NH Lottery vendor in the case, said, “I wouldn’t suggest it’s turning into a purely academic exercise as to what the language of the 1961 statute means, but I don’t detect a whole lot of enthusiasm in the department to bring a Wire Act case. It’s just hard to imagine the department devoting resources to aggressively addressing a problem that arguably doesn’t exist.”
Matthew McGill, who worked w/ NeoPollard in the NH case, says the Barbadoro ruling set aside the 2018 Wire Act opinion and reinforces the 2011. Invoked Administrative Procedure Act, where if "a court finds an agency action unlawful, it will set aside that agency action." #g2e2019
— Jessica Welman (@jesswelman) October 14, 2019
Most vendors with an interest in the growing online market in the US remain frustrated with the case because of the delays in the market. Many states are remaining cautious in their rollout of online lotteries, gaming, and even legislation to legalize said gaming, as they await the outcome of the case.
Former Justice Department official Greg Brower, who now works as an attorney in the gaming industry, noted that the best route for US gaming would be for Congress to pass federal legislation to modernize the Wire Act. However, that is unlikely during these tumultuous times.
“If things in Washington weren’t chaotic or uncertain enough,” Brower said, “the gaming industry might as well have a piece of that chaos, so here we are.”
Supreme Court Bound
The Las Vegas Review-Journal reported from G2E as well, noting that most panelists at discussions agreed that the Wire Act case is headed for the US Supreme Court, no matter the ruling of the US Court of Appeals.
Even so, concern abounded that the path to the Supreme Court could stumble over January 2021, at which point a new presidential administration could take over and turn everything – including the Department of Justice – upside down.
That Supreme Court path, no matter how complicated, is something Judge Barbadoro predicted during the oral arguments phase of the original case. “I have a strong feeling that however I resolve the case, or however the First Circuit resolves the case, it is likely going to be resolved by the US Supreme Court either way,” Barbadoro said. He called the Wire Act case “one of the most challenging statutory constructions I’ve seen in my 26 years on the bench.”
Wowza prediction from Judge Barbardo in Wire Act case — “I have a strong feeling that however I resolve the case, or however the First Circuit resolves the case, it is likely going to be resolved by the US Supreme Court either way.”
— John A Pappas (@yanni_dc) April 11, 2019
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