The court documents have been flying into the list of docket entries at a fever pitch. The US District Court case involving the Department of Justice and US Attorney General William Barr is pending a ruling by Judge Paul Barbadoro.
It all started when the Justice Department’s Office of Legal Counsel published a memorandum to re-interpret the US Wire Act, essentially overruling a 2011 decision that allowed states the right to legalize and regulate online lotteries and gaming. The Wire Act was determined to pertain solely to sports betting in 2011, but the DOJ argued that was a misrepresentation of the Wire Act.
Several states initially objected to the ruling, but it was the New Hampshire Lottery Commission (NHLC) that filed the first lawsuit against the DOJ and Barr. NeoPollard Interactive, the platform provider for the New Hampshire online lottery service, sued the DOJ as well, and NeoPollard became a co-plaintiff with the NHLC.
What started in January took until April to hear oral arguments in the US District Court for the District of New Hampshire, and that day ended with Barbadoro requesting clarification from the DOJ.
At the end of April, the DOJ did file its memo with the court to note that it is still reviewing whether the Wire Act will apply to state lotteries and their vendors but would not prosecute either during the review process. In addition, the DOJ asserted that there was “no present credible threat of prosecution,” and the court lacks jurisdiction, so the case should be dismissed.
The latest development is that NeoPollard and the NHLC sent responses via the court, and the plaintiffs are not happy.
NeoPollard Responds
On May 2, NeoPollard filed its reply to the DOJ’s memorandum, and the company minced no words.
The introduction began:
“While the Department of Justice says its is ‘currently reviewing whether the Wire Act applies to State lotteries and their vendors,’ it evidently knows enough to maintain that the arguments advanced by the New Hampshire Lottery Commission for why the Wire Act does not apply ‘fails to demonstrate its entitlement to a declaratory judgment at this time.’ But as for ‘the viability of other potential theories that the Lottery Commission has not asserted,’ the Department ‘expresses no view at this time.’ So, maybe the Wire Act applies to State lotteries and their vendors, or maybe it doesn’t.“This charade must end.”
The wording of the remainder of the introduction alone was harsh. NeoPollard stated, for example, “Plaintiffs did not bring this lawsuit on a lark.” It called the DOJ’s memo “interpretive gymnastics” and insisted that a declaratory judgment is the only remedy to relieve NeoPollard from the “threat of criminal liability and the many collateral consequences that flow from that.”
And after making its arguments, NeoPollard wrote that the “Court should issue a declaratory judgment stating that the Wire Act does not cover non-sport gambling.”
Lottery Commission Responds
In a less snarky tone but still maintaining its stance, the New Hampshire Lottery Commission sent its own reply to the defendants’ supplemental memo.
With no introduction, the NHLC went right into its argument that it does, indeed, have standing to seek relief and needs the declaratory judgment to “life the specter of criminality that the defendants placed over their legal state lottery enterprises.”
Quite a bit of legalese and case citations led to a predictable conclusion:
“The defendants have made no meaningful attempt to rebut the longstanding interpretive presumption that the term ‘whoever’…does not include the State, its agencies, and its officials and employees acting in their official capacities.”
Other Parties Weigh In
An amici curiae memo was filed by two of the most prominent anti-online gambling organizations in the US: Sheldon Adelson’s Coalition to Stop Internet Gambling (CSIG) and the National Association of Convenience Stores.
The 19-page document started by noting that the federal government has given leeway to states with respect to gambling and lotteries, but New Hampshire’s proposed reading of the Wire Act would “upend this careful balance – allowing a single state that wants to permit gambling as broadly as possible to export that policy to every other state in the Union.” It went on to say, “Not only does New Hampshire’s argument contravene clear federal policy on gambling, it would also punt regulation of interstate gambling to the states – which are woefully unprepared for such responsibilities.”
Oh.
The Commonwealth of Pennsylvania, acting through its Department of Revenue, Secretary Daniel Hassell, and Bureau of Lottery, also weighed in with an amicus curiae to the defendants’ memo.
This reply took a stance that the DOJ’s supplemental memo “does not undermine any of the New Hampshire Lottery’s conclusions.” And in its conclusion, it stated unequivocally:
“The Wire Act does not apply to the states, or to the states’ officials, employees or vendors. Amicus curiae, the Commonwealth of Pennsylvania, therefore respectfully requests that this Court issue the relief requested by the plaintiffs and supporting amici.”
