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The US District Court in New Hampshire hosted oral arguments in a case about the Wire Act on Thursday.
On one side is the Department of Justice, arguing that its new opinion on the Wire Act — that it applies to all forms of interstate gaming — is valid. On the other are the plaintiffs, led by the New Hampshire Lottery, asking the court to say the opinion needs to be thrown out.
You can read a full summary of the proceedings here. Some of the staff at Online Poker Report broke down what went down in the courtroom — with the help of Eric Ramsey, who was on the scene — in our company chat on Slack:
Steve Ruddock: Now that oral arguments have concluded, what stuck out to you and do you feel better or worse about the case?
Jessica Welman: Perhaps it was Eric’s vivid prose on OPR’s live blog, but to me it seemed like the New Hampshire side couldn’t have expected more than what they got today. Obviously, they asked for the moon and did not get it, but I think to expect a complete ruling in their favor today at that very moment was a big ask they knew had little chance of happening.
Eric Ramsey: Yeah, I would say that mirrors the general sense I had in the courtroom too. The proceedings were a bit more conversational than I anticipated, and Judge Barbadoro was not shy about offering direct, on-the-spot feedback to testimony. The majority of the times he indicated that something resonated with him, it was an argument from the plaintiffs’ side of the room.
Dustin Gouker: Well, there was obviously a wide range of outcomes out of this coming into it. A couple of days ago we were worried the judge could toss the case out as moot after the new memo from deputy AG Rod Rosenstein. Soooooo I would say this went pretty well.
What stuck out to me was the DOJ basically being called out for its BS by the judge and the lottery on whether its opinion applied to lotteries. It seems pretty clear everyone but the DOJ believes it does apply to lotteries. (Even the DOJ probably believes it, in its heart of hearts.)
Jessica: I thought it was good to that the judge realized that the threat of an impending lottery opinion from the DOJ was not that far removed from an imminent one.
Eric: That is the key distinction the DOJ was trying to make — that the mere threat of enforcement doesn’t provide proper grounds for a legal challenge — but it didn’t land with the judge. That argument doesn’t jibe with the actual language of Rosenstein’s first enforcement directive, either.
Dustin: Yeah, if you’re running anything with an interstate gaming component — which anything online arguably does as well as multi-state lottery — you’re basically getting a ¯\_(ツ)_/¯ from the DOJ on whether you’re legal or not. That sounds like an awful way to go about biz from a practical standpoint, and it’s nice to hear the law might agree.
Jessica: And, as the plaintiffs pointed out, it completely arrests development on anything new.
Steve: I’ll direct this next question to Eric, but anyone can chime in. It seemed like the judge was consistently siding with the plaintiffs. Having not been in the courtroom, I couldn’t tell if this was because the judge was sympathetic to the New Hampshire Lottery’s case, or aggravated by the DOJ’s brazen attempt to get the case tossed out via an 11th-hour memo, or perhaps both. What was the overall mood in the courtroom?
Dustin: Yeah, I get the sense the Rosenstein memo backfired. Seems like they thought the case could get tossed on those grounds, and the judge stopped just short of LOLing at them.
Adam Candee: The timing and content of the lottery memo only serves to reinforce the perception of the political nature of the original memo. If you’re going to try to rig the game, at least keep some subtlety to how you do it. This was so obvious that anyone involved can see the intent.
Eric: I made a mental note early on that there was very little emotion. The debate on both sides relied almost purely on precedent rather than what seems like it should be fair. Hence, for example, almost an hour of discussion about the legal interpretation of commas. I think that “Monday memo” is the only thing that approached a knee-jerk response, and even then, the judge used case law to dismantle it rather than layman’s logic.
Jessica: Eric, when the judge asked DOJ about their potential to appeal his ruling, did they give off much in how they delivered their response? I know they were cagey in what they said, but curious how the delivery was and if it suggested anything?
Eric: It was the … dodgiest moment of the day to me. DOJ counsel was exceptionally careful in choosing words so as not to commit to anything. It was such an obvious dodge, though, that it ended up drawing a chuckle from the judge and an unspoken understanding that there wouldn’t be a satisfactory answer. He seemed unsatisfied but also unsurprised. Even unanswered, I think that question might be fundamental to the way the judget will structure his decision, should it go in the plaintiffs’ favor.
Dustin: Clear this up for me too, Eric, if you can…the judge seemed to want to have other states involved because of multi-state lottery games, but PA was denied? I feel like I am missing something.
Eric: I feel like I missed a bit here, too. Again, it was very conversational, so much of this was the judge talking through hypotheticals. At one point he directly questioned the plaintiffs’ litigation strategy. But yes he both (1) told out-of-state parties to bother their own qualified judges and (2) said his decision may have been easier if they had intervened in NH. I’m honestly not sure how to legally rationalize those two points.
Jessica: Did he give any indication if NeoPollard (a lottery vendor) had a stronger case than the Lottery? I’ve heard some legal experts say that the vendor portion of this case might be more impactful than the state.
Eric: I don’t know about stronger but it certainly presents another compelling angle. The same issue really extends to lottery personnel for that matter. It will be hard to fill lottery positions or source vendors if the description of services includes violating federal law. Even if the judge ruled that states (and state agencies) are exempt from the Wire Act, those protections wouldn’t necessarily extend to staff and vendors.