Federal Judge Rules Wire Act Applies Only to Sports Betting

  • Judge Paul Barbadoro rules the Wire Act applies only to sports gambling in prohibiting interstate wagering
  • The law does not apply to online lottery gaming such as the Powerball
  • The ruling rejects the Department of Justice Office of Legal Counsel’s 2018 opinion that the Wire Act covers all forms of gambling
Judge banging gavel
Federal judge rules that the Wire Act applies to only sports betting, rather than all gambling.

A little history

The State of New Hampshire has won a legal challenge against the United States Department of Justice’s revised opinion of the Wire Act. Judge Paul Barbadoro ruled that the Wire Act applies only to sports betting rather than all gambling in the US. The DOJ changed the ruling this year to apply it to all gambling, which put the state’s lottery industry at risk.

In 2011, the Department of Justice (DOJ) under the Obama Administration issued an opinion that the Wire Act of 1961 applied only to interstate sports betting. This allowed states to offer online lottery sales, casino and poker games. By 2013, Delaware, New Jersey, and Nevada were offering online gambling. Several other states, including New Hampshire, soon began offering online lottery gaming options.

This year, the DOJ under the Trump Administration decided to change the 2011 ruling, creating an opinion that the Wire Act applies to all online gambling instead of just sports betting. According to VSO News, soon after the new opinion was announced, New Hampshire filed a lawsuit. Initially, the suit was filed to stop the DOJ from interfering.

Soon afterward, other states like New Jersey and Pennsylvania got on board. The states wanted to ensure that their online gaming industries were not at risk.

Positive ruling

In his ruling, Judge Paul Barbadoro granted summary judgment for New Hampshire. He rejected the 2018 opinion of the DOJ’s Office of Legal Counsel claiming that the Wire Act applies to all forms of gambling.

The DOJ had argued that New Hampshire had no grounds for a case because the revised opinion has not yet been enforced. The judge also rejected this argument, pointing out that the state lottery in New Hampshire had openly offered online lottery services, something that the DOJ has now branded as criminal activity.

New Hampshire Governor Chris Sununu said: “Today’s ruling is a historic victory for the State of New Hampshire, and we are proud to have led this effort. New Hampshire stood up, took action, and won—all to protect public education in our state.”

The ruling will not be limited to just the state of New Hampshire. NeoPollard Interactive is the operator of the state’s online lottery gaming. A representative of the company, Matthew D. McGill, said that because the court set aside the “incorrect re-interpretation of the Wire Act,” the ruling has an impact nationwide.

State lotteries and other gaming operators can now rely on the 2011 opinion that the Wire Act is limited to strictly sports betting.

Continued opposition

Those opposed to online gambling and the new decision will continue to fight. The Coalition to Stop Internet Gambling, a group backed by Las Vegas Sands CEO Sheldon Adelson, argues that the ruling is limited and will most likely decide to appeal. The group filed an amicus brief to support the DOJ in the case.

In a statement, the coalition said that it disagrees with Judge Barbadoro’s ruling. However, they are happy that the scope of the opinion was confined to the parties involved in the case. The coalition is confident that other jurisdictions in the US will see the issue differently.