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As everyone waits with bated breath for the New Hampshire Lottery and Neopollard to respond to the Department of Justice’s arguments in the Wire Act case, the Coalition to Stop Internet Gambling (CSIG) has filed a new amicus brief with the First Circuit Court of Appeals.
As you may have guessed the from the name of the organization, the brief is in support of the government. The group, backed by casino magnate Sheldon Adelson, also voiced support for the government’s position at the District Court level. Adelson and company have been prominent fixtures in support of legislation and litigation that would restrict or outlaw online gambling.
The National Association of Convenience Stores (NACS) joined the CSIG in the brief, together offering five substantive legal arguments — two more than the appellants.
Argument one focuses on whether Wire Act applies to the states themselves or just private individuals.
The brief contends that the argument made by New Hampshire (that the Wire Act does not apply to the state itself) is incompatible with the scope of the statute and federal gaming policy more broadly. The amici argue that the phrase “whoever” is inclusive enough to encompass the actions of both private parties and state actors — like the NH lottery.
The amici further assert that any other interpretation would lead to an absurd result where federal law would not apply to the state. According to the brief, “New Hampshire could sell its lottery tickets by mail to people in Alabama or offer online slot machines accessible from computers in Kansas.”
Indeed, the CSIG and NACS raise some interesting points on this issue. At the moment, however, it remains unclear if this is a point that the NH lottery will emphasize. It has yet to file its response brief, and was recently granted an extension to do so.
Argument two follows similarly to the first, but it focuses directly on the word “person.”
The amicus brief makes the argument that terminology in the Wire Act — like the word “whoever” — should apply to both private entities and government actors. The word “person” typically excludes sovereigns (the states), however. The CSIG and National Association of Convenience Stores cite a variety of cases to support their contention that the state can be a “person” in certain instances.
This is a question of first impression with respect to the Wire Act, and the amici do find some helpful case law that suggests that the term may incorporate sovereigns when they are acting in a business capacity.
In fact, the amici make a pretty colorable argument that the Wire Act does apply to state entities. Even the 2011 DOJ memorandum that found the Wire Act does not apply to lottery sales did not appear to suggest that the reason the statute did not implicate state run lotteries was because they were state actors. Instead, the opinion focused on the fact that the drafters of the statute only intended it to apply to sports betting.
Argument three concerns other gambling statutes that regulate gambling, which apply the terms “person” and “whoever” to both private and public entities.
The amici here rely on a number of sections of the US Code related to lottery activities to support this argument. The friends of the court also found a 1966 Supreme Court case, which supports the contention that the Wagering Paraphernalia Act may apply to the states as well. In United States v. Fabrizio, Justice Harlan held that “…it is reasonable to assume that Congress would have given a specific indication of exemption for state-run wagering pools if it had desired to exempt them.”
Suggestively, the Wagering Paraphernalia Act was passed the same year as the Wire Act and preceded by joint hearings on both. It is certainly possible that if the Wagering Paraphernalia Act was intended to apply to state activity, then so too was the Wire Act.
Argument four suggests that the legislative history of the Wire Act supports the argument that the statute applies to state actors.
The amici argue that the the law applies to state entities because the statute was intended to support local law enforcement efforts to disrupt interstate gambling operations.
The interest groups rely on a number of later-passed statutes to support this contention, but evidence that those Wire Act hearings even contemplated state-run gambling is scant at best.
Argument five argues that the Wire Act applies to state employees and state vendors.
This claim, if adopted by a court, could have a serious impact on liability for individual actors. Provided the Wire Act applies to state entities, individual state actors may expose themselves to liability by merely executing their jobs in an official capacity.
A finding of this nature would have sweeping implications across the country — not only for state gambling entities, but conceivably in other areas like marijuana (which remains illegal at the federal level).
There are not a whole lot to take away from this brief, or most amicus briefs generally. This one, however, raises some issues that differ from those the government raised in its initial filing. It’s unclear just how big these issues are, as they did not feature particularly prominently in the District Court decision.
Indeed, the reason that the Wire Act never specifically speaks one way or another about state entities being implicated likely owes to the fact that there was virtually no legal gambling in the country when it passed in 1961. The idea that a state itself would be interested in running a gambling entity was, at the time, totally foreign.
We’ll have a better sense of what direction the case is going to take when the plaintiffs file their response. Per a recent extension, the new deadline is February 26.