New Hampshire Lottery Sues Justice Department Over Wire Act

We knew there would be legal backlash against the U.S. Department of Justice for the Office of Legal Counsel’s revised opinion on the Wire Act and the first shoe to drop comes from New Hampshire. The New Hampshire Lottery Commission has filed a lawsuit against the DoJ and Attorney General William Barr, demanding that the Wire Act not be enforced using the new interpretation.

Though New Hampshire does not have regulated online poker, it did rely on the 2011 OLC opinion on the Wire Act to sell lottery tickets via the internet. For years, the Wire Act was interpreted by the Department of Justice to ban all online gambling, but the OLC took a look at it and in late 2011, issued the opinion that it only applied to sports betting, as the text of the Act plainly reads.

Because of a push from Sheldon Adelson, though, the current administration’s Justice Department told the OLC to go over the Wire Act again and in November, it magically came up with a new, old interpretation that the Wire Act made all online gambling illegal.

In its lawsuit, the New Hampshire Lottery Commission says that the opinion “is not faithful to the text, structure, purpose, or legislative history of the Wire Act,” “would also render the statute unconstitutionally vague, as well as unconstitutional under the First Amendment,” and “also intrudes upon the sovereign interests of the State of New Hampshire without unmistakably clear language demonstrating that Congress intended such a result.”

The lawsuit goes through different scenarios on how badly enforcement of the Wire Act could harm New Hampshire financially.

“….the broadest interpretation of the 2018 Opinion could result in the suspension of all NHLC sales, resulting in an immediate annual loss of over $90 million to the State, as well as additional expenses to try to comply with the 2018 Opinion,” the lawsuit reads.

“To the extent the NHLC cannot utilize Internet communications in any of its operations, sales would likely be reduced to approximately 25% of their current level.”

It takes it down a notch, explaining a more conservative scenario that is still crap:

Less severe interpretations of the USDOJ opinion may still require suspension of multi-jurisdictional games and compacts that have operated with great success for the nation’s lotteries since the 1980’s. The sharing of bet information and money from wagers across state lines is essential to the operation of these games. Such an action would deprive New Hampshire of approximately $80 million in annual revenue and $40 million in education funding.

One of the roughest consequences of the new Wire Act opinion is that it makes it illegal for the financial transactions related to gambling to cross state lines, something which is quite common. A lottery operator, for instance, might sell a ticket online to someone within state borders, but the banking transaction might be routed out of state. The lawsuit uses some dark terms for this issue, saying, “The USDOJ’s reversal of the 2011 Opinion, without any further action or explanation, is also likely to have a chilling effect on banks accepting and processing these lottery-related transactions, which can effectively shut down this sales channel. This would result in a loss of approximately $6-8 million in education funding for New Hampshire.”

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