In a closely watched case, a New Hampshire federal court has ruled that the Wire Act is limited to sports betting and set aside the DOJ’s recent opinion to the contrary. However, it limited the scope of its declaratory relief to the parties and deferred a decision on whether to extend the declaratory judgment to non-parties on behalf of the Lottery Commission, but gave the Lottery Commission 14 days to file an appropriate motion and supplement the record with adequate factual and legal support on that point.
As we previously reported, the New Hampshire Lottery sued the Department of Justice (DOJ) to prevent enforcement of the DOJ’s Opinion (issued in January 2019) reinterpreting the Wire Act. The DOJ opinion reversed its own 2011 Memo, in which it opined that the prohibitions of the Wire Act were limited to sports betting. In the DOJ Opinion, the DOJ concluded that the 2011 opinion was wrong! It newly concluded that only one of four parts of the Wire Act apply to sports betting, while the other three apply to any online betting. This concerned the New Hampshire Lottery (and one of its vendors) enough to cause them to file complaints seeking a judicial interpretation of the Wire Act. The NH Lottery complaint raised concerns about its “iLottery” gaming platform that gives players located in New Hampshire the ability to purchase and play select lottery games on their personal computers, mobile and electronic devices. Despite requiring that any players purchasing lottery tickets through its iLottery platform be located in New Hampshire and using age verification software and geolocation technology, the NH Lottery was concerned the new interpretation could render its activity illegal. The reason, as acknowledged in the complaint, is that transmissions through New Hampshire Lottery’s iLottery may sometimes travel across interstate lines. The suit sought a declaration that “the Wire Act does not prohibit the use of a wire communication facility to transmit in interstate commerce bets, wagers, receipts, money, credits, or any other information related to any type of gaming other than gambling on sporting events and contests” and an order setting aside the DOJ Opinion pursuant to the Administrative Procedure Act (“APA”). The Government responded by filing a motion to dismiss the complaints pursuant to Rule 12(b)(1), because the plaintiffs lack standing to sue, and Rule 12(b)(6), because the complaints fail to state viable claims for relief. The Government argued that the plaintiffs lack standing because they do not face an imminent threat of prosecution. The court disagreed.
The Court found that the plaintiffs easily satisfy the imminence requirement for standing, stating:
First, they have openly engaged for many years in conduct that the 2018 OLC Opinion now brands as criminal, and they intend to continue their activities unless they are forced to...
