DOJ fails to have Wire Act lawsuit dismissed

The road to the final opinion on the Wire Act began on Thursday, as arguments were heard regarding the lawsuit against the Department of Justice (DOJ).

In what came as a surprise to no one, the DOJ tried unsuccessfully to have the lawsuit dismissed during arguments. Most experts saw this coming after a memo issued earlier in the week by Deputy Attorney General Rod Rosenstein. He tried to put the kibosh on the New Hampshire Lottery Commission’s lawsuit by stating the new opinion of the Wire Act did not include state lotteries.

What is the latest on the Wire Act lawsuit?

Let’s back up a second and explain why that’s relevant. The DOJ issued their new opinion on the Wire Act in January. It reversed a previous opinion that stated the Wire Act, which made the transmission of bets and wagers between state lines illegal, applied only to sports betting.

Under the new opinion the DOJ stated the Wire Act applied to all forms of gambling.

The words “forms of gambling” are what brought the New Hampshire Lottery Commission into the fray. They rely of interstate lotteries for a substantial amount of tax revenue which they feared was threatened by the new opinion.

That led to them launching their lawsuit, which was joined by several other states through amicus bills. Many of these states relied on lotteries for tax dollars. Others, such as New Jersey, had interstate online poker compacts to share player liquidity that was also threatened by the new opinion.

Thursday, the DOJ tried to use the memo issued by the Deputy Attorney General to get the case dismissed. They argued that the memo showed that the new opinion was no threat to the New Hampshire Lottery Commission and should be dismissed for this reason.

Judge Paul Barbadoro, who was overseeing Thursday’s arguments, did not agree with the DOJ that the memo removed all possibilities of harm from New Hampshire and the other state’s dependant on lottery revenue.

He gave the DOJ 14 days to determine the exact reach of the new Wire Act opinion. Once the DOJ provides this information to the court the Judge would consider it and look at other factors of how the Wire Act is written before making his decision.