New Hampshire issues legal challenge to DOJ’s Wire Act interpretation

by Luke Andrews, 18 February 2019

The New Hampshire Lottery Commission (NHLC) has issued a legal challenge to the US Department of Justice’s (DOJ) new interpretation that the Wire Act does not just encompass sports betting.

New Hampshire is the first state to file a legal complaint about the ruling. © Pexels.

Together with the Attorney State General Gordon McDonald, the NHLC filed a complaint in the US District Court on Friday. The DOJ and William Barr are named as defendants.

The complaint centres around the DOJ’s recently announced new interpretation of the Federal Wire Act, which could have wide-ranging effects on the gambling industry in the US. The NHLC estimates it could lose up to $90m in sales.

The Wire Act is a 1961 Federal Law that prevents gambling issued across state lines. Up until now the Act had only applied to sports betting, after the Obama administration’s opinion issued in 2011.

After that verdict, numerous states, including Nevada, New Hampshie, New Jersey, and Delaware, set up interstate lotteries or poker services. With the DOJ’s ruling, the future of those services is unclear.

The NHLC say that the new reading ignores “clear, binding precedents” of the Act, alongside contradicting the aforementioned 2011 interpretation. The issue of payment processing also arises. Experts have questioned exactly how the law would be enforced and if payment processors would be forced to block intra-state transasctions. The NHLC noted that:

given the nature of the internet… we cannot guarantee that intermediate routing of data or information ancillary to the transaction does not cross state lines.–Statement, New Hampshire Lottery Commission

In a statement, the NHLC continued, saying the reading:

exposes the New Hampshire lottery system to substantial uncertainty as to the continued legality of its operations, which fund New Hampshire’s public education system.–Statement, New Hampshire Lottery Commission

New Hampshire is the first to open legal proceedings and is seeking the decision that lotteries will be exempt from the new reading. The NHLC is also pushing for the court – the First Circuit Court of Appeals – to dismiss the DOJ’s opinion and prevent enforcement.

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