Facing stiff opposition, the US Department of Justice (DOJ) is looking for ways to avoid litigation with different states over the latest Wire Act Opinion.
The Department of Justice (DOJ) hasn’t been active when it comes to online gambling since 2011 when it decided that state lotteries can run their operations across borders as the Wire Act of 1961 applied only to sports betting activities.
This was a good day in America’s online gambling history. Understandably, iLotteries are far from most casino products, but with a lot of localized effort, various states, including New Jersey, Nevada, Delaware, Pennsylvania and now others have managed to legalize their casino industries.
While DOJ has been dormant for the most part, the slumbering giant has woken up deciding to completely rescind its previous decision. In January, 2019, Deputy Attorney General Rod Rosenstein signed a new Wire Act Opinion into law, making all online gambling – particularly across state borders illegal.
The laws were originally supposed to be enforced in April, but facing a tough opposition, the DOJ caved. Choosing a cowardly approach, the DOJ has decided to postpone the enforcement of the Wire Act until June and many wondered why.
Today the answer is plain and simple – DOJ wants to avoid trouble.
New Hampshire Sues the Villain
The events leading up to this moment begin with New Hampshire. In almost a heartbeat, three independent lawsuits came from New Hampshire shortly after the Wire Act was announced in its latest form.
On February 15, the New Hampshire Lottery Commission lodged a complaint against US Attorney General William Barr, with the Commission shooting for an injunction of the new Wire Act Opinion.
Since the DOJ’s Office of Legal Counsel (OLC) reversed the 2011 Opinion, tensions have been rising. Trade groups in New Hampshire also acted on threats to pursue a legal course of action. Meanwhile, the states of New Jersey and Pennsylvania expressed readiness to litigate with the DOJ should the Department fail to reconsider their stance.
It’s in this context that the DOJ has decided to respond.
DOJ Insists NH’s Lawsuit to Be Dismissed
The latest news come from the Department of Justice which has finally issued a response which has chosen a rather cowardly approach to begin with – the DOJ wants to dismiss the case altogether.
The Department produced a 47-page motion on Friday, March 22 explaining in detail why the case against the Wire Act Opinion, as outlined by the NH Lottery Commission, was untenable.
The heart of New Hampshire’s claim, in this case, is not that the government is threatening to do something that will violate their constitutional rights, but rather they disagree with the government about whether a federal criminal statute applies to certain commercial wagering activity.
There will be discussions regarding a dismissal on April 8, which will give both parties enough time to prepare. This is going to be the first time when the DOJ has been challenged in a court over the Wire Act Opinion.
New Hampshire Is Not Alone
Whatever the outcome of these discussion, it’s highly unlikely that states who have legalized online gambling would drop the issue. Michigan and Virginia just advanced their respective bills and are readying up for a launch.
West Virginia, New Jersey and Pennsylvania have expressed readiness to fight the issue in court as well. In the case of New Jersey, contesting federal laws is definitely the state’s element as we saw in 2018 when New Jersey finally defeated PASPA.
Back to the original point, even if New Hampshire is dismissed, the DOJ will face an insurmountable mountain of lawsuits, not to mention that New Hampshire won’t let the issue slide.
So far, New Hampshire hasn’t been alone – apart from the mentioned states, there are quite a few more. In fact, over 15 agencies and states have said that they will support NH, and that’s just rookie numbers.
NH is de facto representing 12 individual claims issued by the following members:
- Virginia Lottery (which just adopted online gambling)
- Colorado State Lottery Division
- Kentucky Lottery Corporation
- District of Columbia
- North Carolina Education Lottery
- Tennessee Education Lottery Corporation
New Hampshire has a good reason to pursue action against DOJ as the Lottery is significant part of the state’s budget plans. The lawsuit claims that:
The State of New Hampshire cannot develop a budget that includes money generated from illegal activity. Similarly, the New Hampshire Lottery Commission needs clarity on the legality of its current arrangements so that it can respond appropriately in establishing its own operational plan for the upcoming fiscal year in a manner that conforms to federal law.
This gives NH the grounds to argue against any attempts to dismiss the lawsuit. Meanwhile, there have been rumors that the DOJ would try to consolidate the Wire Act’s position by excluding the state lotteries, hoping to assuage some of the ill-will directed at the Department.
This is unlikely to work as most states are now expanding beyond iLotteries and into online casinos.
Is Sheldon Adelson Still in It?
The name casino boss Sheldon Adelson has been mentioned in several respected medias as the main culprit behind the reversed Opinion. Since January, though, we have seen and heard almost nothing of Mr. Adelson who’s been reportingly very ill.
Nevertheless, Mr. Adelson is also in the bedrock of the current predicament online gambling is. He is the founder of the Stop Internet Gambling coalition and he’s been a known supporter of frighteningly technologically illiterate politicians.
Even if it seems like the DOJ’s been manipulated into issuing the Wire Act in favor of lobbyists, proving so will be very difficult to begin with. DOJ’s legal machine can be reined in to tackle issues at an exceptional pace whereas inter-state initiatives would require more coordination.
The next weeks will be deciding.