Lotteries not impacted by Wire Act opinion, DoJ claims

9 April 2019

The Department of Justice (DoJ) has claimed that its revised stance on the 1961 Wire Act did not address the legality of interstate and online lotteries, with a review into the matter ongoing.

The claim, supported by a memo from Deputy Attorney General Rod Rosenstein, suggests that the DoJ is still examining whether state lottery operations should fall under the Wire Act's jurisdiction. As a result, the Department claims that there are no grounds for a legal challenge, which should therefore be dismissed. 

Rostenstein’s memo states that Department of Justice attorneys should refrain from enforcing the revised Wire Act stance, which states that the legislation applies to all forms of gambling and not just sports betting, on state lotteries until the review is concluded.

Should the DoJ rule that interstate lottery operations come under the jurisdiction of the Wire Act, Rosenstein says state lotteries will be given a 90-day window in which to ensure their operations are compliant with federal law.

The filing was made as part of the ongoing legal challenge launched in New Hampshire on behalf of the state lottery corporation. It addressed the New Hampshire Lottery Corporation’s memorandum of law objecting to the DoJ’s motion to dismiss the case, filed on March 25.

In its objection, the lottery says the DoJ “studiously ignored” the question of whether the new Wire Act opinion extends to state lotteries in its motion to dismiss. However the Department argues that the lottery cannot force it to decide whether or not it should adopt an enforcement position through legal action.

It argues that as a result of Rosenstein’s memo, there is no credible threat of prosecution for the state lottery, and as a result the case should be dismissed for a lack of standing.

The New Hampshire Lottery maintains that the revised opinion could force it to withdraw certain games, resulting in the state losing around $90m a year in revenue. A ban on interstate gambling transmissions, meanwhile could cut sales by around 25% per year, with a ban on multi-state games such as Powerball likely to reduce lottery revenue by up to $80m (£61.2m/€70.9m) per annum.