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PA and iDEA Among Amicus Briefs in Wire Act Case

Written by Jennifer Newell
Last updated on
Jennifer Newell

Last week, the plaintiffs in the Wire Act case filed their response to the defendants’ brief. Within days, there were six amicus curiae briefs on file with the US Court of Appeals for the First Circuit, all in support of the plaintiffs.

New Hampshire Lottery Commission (NHLC) and NeoPollard Interactive won their initial case in the US District Court last year. They sued the United States Department of Justice and Attorney General William Barr over the 2018 Office of Legal Counsel’s memo overturning the 2011 DOJ ruling regarding the Wire Act.

Judge Paul Barbadoro set aside that most recent Wire Act interpretation, ruling that the 2011 decision was correct in its assessment that the Wire Act applied only to sports betting. Obviously, the DOJ and Barr did not agree with that ruling and filed an appeal last summer. And those defendants filed their initial brief with the US Court of Appeals in December.

On February 26, plaintiffs NHLC and NeoPollard each filed their response briefs, asserting that the Appeals Court should uphold Barbadoro’s decision in their favor. NeoPollard went a step further to request oral arguments to resolve the legal questions in play.

This week, six entities filed amicus briefs in support of NHLC and NeoPollard.

iDEA for its Member Organizations

The iDevelopment and Economic Association (iDEA), active since 2016, advocates for legalized interactive online entertainment in the form of regulated gaming, from online poker to lotteries. It is natural that the organization wanted to weigh in on this case.

iDEA submitted its brief to the court in support of the plaintiffs/appellees and supporting affirmance. And it wanted to weigh in on behalf of its member-organizations that rely on the 2011 DOJ opinion to do business.

“Despite having relied in good faith on the DOJ’s earlier, longstanding interpretation of the Wire Act and, as a result of that reliance, having poured millions of dollars into technology and infrastructure to establish legally compliant, state-licensed iGaming operations, iDEA and its members now face grave legal peril should the DOJ’s new interpretation of the Wire Act take effect.”

With the support of all parties, iDEA requests that it be allowed ten minutes of oral argument in the Appeals Court.

Pennsylvania for the Elderly

The Commonwealth of Pennsylvania is one of many states in America with a lot on the line in this case, but its statement of interest primarily references the Pennsylvania Lottery. It is in charge of selling various lottery games on various platforms, each using some type of wire transmission but especially – and obviously – its iLottery uses the internet. And the state launched that lottery option based on the 2011 DOJ opinion.

The state uses proceeds from the Pennsylvania Lottery to benefit older residents via property tax relief and rent rebate programs, reduced-fare transit and prescription drug benefits. In total since the lottery launched in 1971, it has raised more than $30 billion for those programs.

Should the DOJ succeed in overturning the 2011 Wire Act opinion, Pennsylvania notes that it could result in the suspension of most or all of its state lottery sales, costing the state more than $1 billion per year, in addition to jobs and people surviving on the aforementioned programs.

“This lawsuit arose from the USDOJ’s abrupt reversal of its long-standing position that the Wire Act is limited to sports gambling, not only risking the Pennsylvania Lottery’s investments in and future revenue from the iLottery platform but also risking the traditional games that have relied on data transmissions for more than 30 years.”

The Commonwealth of Pennsylvania requests five minutes of oral arguments in addition to argument time given to the plaintiffs.

IGT to Defend Against CSIG

International Game Technology is best known for manufacturing slot machines, but when it merged with Gtech in in 2014, it took on the management of state and provincial lotteries as well. IGT filed its brief in support of the appellees.

The core of IGT’s filing is to defend lottery vendors like itself from the argument made by the Coalition to Stop Internet Gambling (CSIG), which filed an amicus brief in support of the government. CSIG argued that lotteries and their vendors like IGT are subject to prosecution under the Wire Act. IGT contends that neither appellee responded to that argument in their briefs, so IGT wants to do so itself.

In addition, much of its business with lotteries is in jeopardy should the DOJ decide to prosecute any aspect of state lotteries.

“The government’s litigation-driven memoranda of forbearance give no peace of mind to state lotteries and their agents, and they do nothing to limit the government from enforcing the Wire Act against state lotteries as soon as it is freed from this litigation.”

IGT also requested ten minutes of oral argument time or an equal amount of time given to CSIG.

Association of Gaming Equipment Manufacturers

This non-profit trade association represents the interest of manufacturers and suppliers in the gambling and lottery industry. Its brief represents its members who do their business lawfully but are now threatened by the “overbroad” reading of the Wire Act. It also supports the “District Court’s narrower, well-reasoned construction.”

The Association of Gaming Equipment Manufacturers notes that the 2018 DOJ opinion would “destabilize investments and policy choices” made since 2011 and based upon that opinion. Further, the group asserts that the latest DOJ opinion conflicts with other federal gaming laws and override state laws.

New Jersey Attorney General for NJ

Gurbir Grewal, Attorney General of New Jersey, has wanted to be involved in this case since the 2018 Wire Act opinion was made public. In fact, he filed a lawsuit in the US District Court in May 2019 to find out why the DOJ issued that opinion in 2018 in the first place.

As New Jersey has developed the most profitable and fastest growing internet gaming business of any state thus far, it has a unique interest in defending it. The state filed the amicus brief on behalf of the businesses and residents of its state, as well as New Jersey’s economy as a whole.

“New Jersey’s internet gaming industry, in particular, has generated hundreds of millions of dollars in wages and thousands of new jobs in the state. Over a three-year period, iGaming has produced over 4100 million in revenue for the state, and the industry is growing at a 27 percent annual rate.”

Michigan and 17 Other Jurisdictions

The Michigan Lottery filed an amicus brief as a request that the Appeals Court affirm the District Court decision. Its aims and conclusions don’t differ much from the aforementioned amici, noting that the 2018 opinion is contrary to law and that all involve fear prosecution if that opinion is allowed to stand.

“Plaintiffs and their amici face a substantial risk of prosecution that persists despite the April 2019 memo, and amici urge the Court to protect the billions of dollars in public revenues at stake and resolve this dispute by affirming the district court.”

The Michigan Attorney General signed the amicus curiae, which also represented the following:

–South Dakota Attorney General

–Alaska AG

–Ohio AG

–Wisconsin AG

–Delaware AG

–Delaware Lottery Director

–North Carolina AG

–Kentucky Lottery Corporation Senior VP

–Virginia AG

–Colorado AG

–Vermont AG

–Minnesota AG

–Idaho AG

–Washington D.C. AG

–Rhode Island Revenue Department Lottery Division

–Maryland AG

–Connecticut AG

–Tennessee Education Lottery

 

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