Federal Judge to DOJ: Wire Act Only Applies to Sports Betting

New Hampshire judge ruled law applies only to bets or wagers on sporting events or contests—not online lottery games.

June 05, 2019

Concord, NH – On Monday, Federal District Court Judge for the District of New Hampshire, Paul Barbadoro, rejected the Justice Department’s abandonment last year of a legal opinion that had paved the way for the growth of online gambling.

Under the Obama administration, the Department of Justice (DOJ) opined on whether in-state sales of lottery tickets over the internet would violate a federal law called the Wire Act, determining in 2011 that the law prohibited online sports gambling but not other forms of internet-based wagering, such as lotteries. But in late 2018, the Trump administration Justice Department reversed that opinion, finding that Wire Act broadly prohibited online betting.

Barbadoro, granting the New Hampshire Lottery Commission’s request for summary judgment, said the Justice Department’s new legal opinion rested on a faulty reading of the Wire Act. “Based on the text, context, and structure of the Wire Act,” he said it was clear that the law is “limited to sports gambling.”

“The 2018 OLC opinion,” he added, “is set aside.”

The opinion was issued in a case brought by the New Hampshire Lottery and its Internet gambling provider NeoPollard seeking to invalidate the 2018 DOJ opinion so as to pave the way for the Lottery to offer internet gambling on lottery and casino games.  

In finding for the Lottery and NeoPollard, the judge limited the ruling’s scope by refusing to issue a nationwide injunction against application of the 2018 opinion. At this point, Barbadoro’s ruling applies only to New Hampshire and to the activities of the New Hampshire Lottery and NeoPollard. The judge has yet to rule on a petition filed by NACS and the Coalition to Stop Internet Gambling to intervene in the case, although that ruling is anticipated shortly.

The DOJ is expected to appeal the judge’s decision. Recognizing the limited reach of the judge’s opinion and the likelihood of an appeal, it is expected this case (and the issue of internet gambling) could take months working its way through the judicial system. NACS is exploring all legal options to determine the best response from the convenience industry.