NH Lottery vendor blasts DOJ over Wire Act ‘charade’

3 May 2019

NeoPollard Interactive, the vendor for the New Hampshire Lottery, has hit out at the Department of Justice (DOJ) over its uncertainty as to whether the Wire Act applies to interstate and online lotteries, calling for the “charade to end”.

The DOJ is in the process of reviewing whether the 1961 Wire Act covers state lotteries and their vendors, having already made several statements on the case this year.

In January, the DOJ revised its 2011 ruling on the Wire Act to state that the law’s prohibition applies to all forms of gambling and not just sports betting. However, the DOJ last month said that this revised stance does not address the legality of interstate and online lotteries.

The April filing came in response to a legal challenge from New Hampshire over the revised opinion, and NeoPollard has now made a further filing on the matter in New Hampshire District Court.

In its filing, NeoPollard said the Wire Act is a criminal statute that imposes severe penalties, including lengthy terms of imprisonment, on violators and that the authority of the existing Act should not be understated.

NeoPollard also notes that violations of the Act can serve as predicates for criminal prosecution under the Racketeer Influenced and Corrupt Organisations Act, which carries longer prison sentences.

“This charade must end,” the filing said. “The plain truth is that whatever the Department might later conclude, there is no definitive case law to conclude that vendors to state lotteries such as NeoPollard can be categorically removed from the ambit of the Wire Act.

“The only path forward for NeoPollard is that charted by the Department’s 2011 opinion: a conclusion that the Wire Act is limited to sports betting.

“The Department’s recent interpretive gymnastics make clear that only a declaratory judgment from this Court, not further discretionary forbearance from prosecution, and certainly not a new opinion from the Office of Legal Counsel, can relieve NeoPollard from the threat of criminal liability and the many collateral consequences that flow from that.”

NeoPollard goes on to say in the filing that the court should resolve its claim for a declaratory judgment that the Wire Act does not apply beyond sports gambling, saying there is no support for excluding state vendors from the Wire Act’s sweep.

“NeoPollard has sought a declaratory judgment that the Wire Act covers only sports gambling, and they are entitled to that relief,” the filing added.

The New Hampshire Lottery maintains that the revised opinion could force it to withdraw certain games, resulting in the loss of around $90m (£69.1m/€80.6m) for the state each year.

A ban on interstate gambling transmissions could cut sales by 25% per year, while a ban on multi-state games such as Powerball is likely to reduce lottery revenue by up to $80m per annum, the lottery stated in its lawsuit filed in February.