First Circuit Clarify Wire Act For US Lotteries

According to a ruling released this week by the First Circuit clarifying that the law remains in effect primarily to avoid the occurrence of interstate online sports wagering, the US lottery sector will not be subject to the strictures of the Wire Act.

Overruling US Dept. of Justice (DoJ)efforts

The decision overrides the US Department of Justice (DoJ )’s in 2018 to criminalise a wide variety of the gambling industry by reinterpreting the Act to cover all forms of mobile gambling, including the selling of online lottery goods and interstate sports wagers.

New Hampshire Lottery Commission

In June 2019, when the United States District Court for the District of New Hampshire ruled in favour of the New Hampshire Lottery Commission (NHLC), which questioned the recent interpretation of the Justice Department, the change was temporarily thwarted.

Notice of appeal

The DoJ subsequently filed a notice of appeal with the First Circuit in August, in line with the wishes of industry stakeholders, casting a further cloud over the lottery sector and leaving it to weigh possible losses amounting to billions of dollars.

The decision this week, issued by US Circuit Judge William Kayatta, would bring a tremendous amount of relief across the country to lottery, poker and casino operators. In summary, the Judge cited a lack of coherence in the proposed interpretation of the Wire Act by the government, arguing that it strained common sense.

The final line of the decision was as blunt as it was emphatic, reading: “In conclusion, we find that the plaintiffs’ claims are justiciable and that the Wire Act applies only to interstate wire communications related to sporting events or contests.”

Internet lottery

The New Hampshire Lottery Commission, which took the battle to the DoJ to ensure that its Internet lottery offering will remain legal, must deserve tremendous credit for the successful ruling this week.

Charlie McIntyre, Executive Director, reported at the time: “The New Hampshire Lottery has a responsibility to support education in New Hampshire. Just last year, the New Hampshire Lottery generated $87.5m in net profits, all of which supports education in New Hampshire, and we expect to generate more than $90m for education this year. This reversal by DOJ puts that support for education in question.” 

The consequence of the ruling this week is that it should put to bed the plans of the DoJ to extend the reach of the Wire Act to ensnare gaming types beyond sports wagering.

‘And we win’

IDEA Growth Founder Jeff Ifrah, who has previously cited the actions of the DoJ as unjustified, reacted to the latest social media development by saying: “And we win. The 1st Circuit upholds the District Court’s Opinion and rejects the OLC’s opinion. The 1st Circuit holds that the Wire Act only (and obviously) applies to sports events and contests! Big Win!”