Some of gambling’s biggest action this past week took place in a New Hampshire courtroom.
Last Thursday, US District Court Judge Paul Barbadoro presided over the opening arguments in the New Hampshire Lottery’s lawsuit against the US Department of Justice and its new interpretation of the federal Wire Act. Barbadoro’s final decision will impact the future of state lotteries and online gaming in Pennsylvania and beyond.
Wire Act ruling puts billions in jeopardy
The case in New Hampshire originated with the Federal Wire Act. The DOJ issued a new interpretation of the Wire Act in January, opining that the law applied to all forms of interstate gaming, potentially criminalizing all forms of online gambling.
Since Pennsylvania and many other states require interstate support for their lottery games, lotteries across the country are in jeopardy until the legal process plays out. Those include Powerball and MegaMillions.
In short, those popular gaming options — and the billions in revenue they produce — are in a holding pattern until the Wire Act issue is resolved.
Recent developments are good for PA lottery
Before the court arguments in New Hampshire even began, US Deputy Attorney General Rod Rosenstein sent a letter last week to DOJ employees. Rosenstein’s letter advised his employees not to apply the latest Wire Act ruling to state lotteries when the June 14 deadline for enforcement arrives.
This was the first win for the lotteries. Others may follow.
Pennsylvania is closely tied to NH lawsuit
Pennsylvania attempted to be a co-plaintiff in the New Hampshire case, but was limited to an amicus brief, along with New Jersey and Michigan. Eleven other states and the District of Columbia co-signed Michigan’s brief.
According to the article on Play Pennsylvania, Barbadoro seemed to sense the need for a broad resolution.
“If [I] just declare that the New Hampshire Lottery Commission is not in violation of the Wire Act, they don’t get accorded complete relief,” Barbadoro said. “Because they’re not able to conduct the lawful activity with their partners.”
The court date ended with no decision and no clear resolution, but the states and their lottery officials remain optimistic.
After the opening arguments, Barbadoro ruled that the Department of Justice must submit a filing responding within a week.
The New Hampshire lottery will have a week to respond. Sometime after that, the US District Court will issue its judgment.
Sports betting remains unaffected
While state lotteries are locked in a waiting game, sports bettors can continue to play with confidence. Pennsylvania sports betting regulations were established in line with the Wire Act, so sports gambling should continue as normal.
Furthermore, the Department of Justice’s earliest possible enforcement date is June 14, so Pennsylvanians who participate in any form of gaming will be free from interruptions until at least then.
Beyond that, the courts will decide. But it seems the early indicators favor the gaming industry over the government. Even with Rosenstein’s memo, the Department of Justice appears to be on defense.
“I have a very difficult time seeing how the Rosenstein letter would deprive the plaintiffs of the standing they would otherwise have,” Barbadoro said in the article.
The Supreme Court may be involved before it’s over
Barbadoro’s final ruling should arrive sometime next month. But that may not be the last word.
Many people expect that the Wire Act interpretation – and the challenges that have followed it – will ultimately end up in Washington D.C.
“I have a strong feeling,” Barbadoro said in the article. “That however I resolve the case, or however the First Circuit resolves the case, it is likely going to be resolved by the US Supreme Court either way.”