DOJ argues Wire Act plaintiffs lack standing to proceed

DOJ Asks Judge To Toss Wire Act Lawsuit In New Hampshire

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The US Department of Justice is seeking dismissal of the lawsuit brought by the New Hampshire Lottery Commission (NHLC) in response to the department’s new Wire Act opinion.

On Friday, the DOJ filed a 47-page motion to dismiss, arguing that the plaintiff “lacks standing” to proceed.

“The heart of [New Hampshire] 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.”

Arguments in the case are scheduled to begin during the week of April 8.

DOJ files motion to dismiss

Here is the DOJ’s motion in full:

DOJ Wire Act

Are state lotteries in trouble?

In January, the DOJ Office of Legal Counsel published an updated opinion of the federal Wire Act concluding that it pertains to all forms of gambling — not just sports betting.

In response, 15 states and agencies filed briefs supporting the NHLC’s lawsuit, and more have since joined. Opponents of the new opinion worry it could threaten lottery programs, which drive substantial state revenue.

New Hampshire is currently building its biennial budget, which must be in place by June 30. Lottery sales, including online lottery tickets, will account for a significant portion of the total funding.

Here’s an excerpt from a March 1 joint filing:

“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.”

New Jersey and West Virginia are among the other states involved in the crusade against the DOJ opinion.

Deadline extension creates time

There is some flexibility in the timeline for enforcement of the new opinion.

Earlier this month, the DOJ extended its 90-day compliance window by an additional 60 days. The original April 15 deadline is now June 14.

By then, much of the legal groundwork should be established. The parties have agreed to the following schedule in court:

  • March 29: Plaintiffs’ deadline to file individual reply briefs in support of their motions for summary judgment and in opposition to Defendants’ dispositive motions
  • April 8: Defendants’ deadline to file a single reply brief in support of their dispositive motions
  • April 10-11: Oral arguments

According to those on the ground, the court will hold a status conference on April 2 to discuss procedures for oral arguments.

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Adelson’s name surfaces

There is much speculation that the updated Wire Act opinion was a political favor for casino mogul Sheldon Adelson. A longtime Republican mega-donor, Adelson is the nation’s largest opponent of legal online gambling.

In January, the Wall Street Journal reported similarities between the DOJ’s “unusual reversal” and arguments made by Adelson lobbyists. According to the WSJ, top DOJ officials received a memo from Adelson’s team contending that their working, 2011 interpretation opinion was wrong.

The memo was then forwarded to the OLC, which ultimately issued a coinciding opinion.

- Nick comes from West Texas where he graduated from Texas Tech University with a degree in psychology. After a five year stint in Chicago where he wrote about local politics and graduated with a master’s degree in journalism from Columbia College Chicago, he moved to Washington, D.C. to write about issues related to gambling policy, sports betting and responsible gaming.
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