The U.S. Department of Justice is starting to show its cards in defense of the lawsuit brought by the New Hampshire Lottery Commission (NHLC) over the DoJ’s revised opinion on the Wire Act and to my non-lawyer eyes, the Department’s hand looks weak. That doesn’t mean that hand won’t win, though.
To review, the DoJ’s Office of Legal Counsel (OLC) published a new opinion on the Wire Act in January (opinion was officially issued in November), saying that the Wire Act makes all interstate online gambling illegal. This reverses an OLC opinion from late 2011, which said that only internet sports betting is banned.
Reports are – and this should come as absolutely no surprise to anyone – that Sheldon Adelson had pull in the DoJ and was a major catalyst for the OLC to review the Wire Act again.
The NHLC, rightfully worried that the new opinion could hurt its ability to sell lottery tickets online and possibly even scuttle multi-state lotteries like Powerball and Mega Millions. In February, the NHLC filed a lawsuit against the DoJ and Attorney General William Barr, saying, among other things, 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.”
In March, the DoJ filed a motion to dismiss and has now filed another document, one which includes a memo from Deputy Attorney General Rod Rosenstein dated April 8th, 2019. In the memo, Rosenstein says that the DoJ did not make any judgment about state lotteries in an obvious effort to try to get the NHLC off its back. Witness:
On January 15, 2019, I issued a memorandum titled “Applicability of the Wire Act, 18 U.S.C. § 1084, to Non-Sports Gambling,” directing you to refrain from applying Section 1084(a) in criminal or civil actions to persons who engaged in conduct violating the Wire Act in reliance on the 2011 opinion of the Office of Legal Counsel (OLC), and for 90 days after the publication of OLC’s revised 2018 opinion. My memorandum of February 28, 2019, extended the window until June 14 ,2019.
The OLC opinion did not address whether the Wire Act applies to State lotteries and their vendors. The Department is now reviewing that question. Department of Justice attorneys should refrain from applying Section I 084(a) to State lotteries and their vendors, if they are operating as authorized by State law, until the Department concludes its review. If the Department determines that the Wire Act does apply to State lotteries or their vendors, then Department of Justice attorneys should extend the forbearance period for 90 days after the Department publicly announces this position. This would allow State lotteries and their vendors a reasonable time to conform their operations to federal law.
“You think by saying the Wire Act makes all interstate online gambling we meant state lotteries? No no no no…we didn’t mean anything of the sort. We would never do that to you! And please drop your lawsuit.”
It’s all clearly bullshit and hopefully the NHLC won’t fall for the “don’t worry, we’ll look into it” defense and drop its case.