Gambling body to challenge DOJ
The New Hampshire Lottery is continuing its fight against the Department of Justice’s (DOJ) Wire Act, having filed a 90-page brief with the United States First Circuit Court of Appeals.
The issue concerns a new directive for the 1961 Wire Act that was published in January 2019, which would have serious consequences on cross-state gambling.
Despite the DOJ issuing reassurance in April 2019 that the new directive “did not address whether the Wire Act applies to State lotteries and their vendors,” this did not reassure concerns in New Hampshire.
New Hampshire Lottery’s argument
The New Hampshire Lottery’s legal team is pushing for the appeals court to have the 2019 directive vacated. It says it is still unclear whether or not the lottery has to stop its operations, as all of its products utilize the internet in some shape or form.
New Hampshire losing out on $90m annually straight away
The attorneys argue that the consequences of any decision would be immense. The directive could be interpreted to mean that all online lottery sales need to be suspended, which would see the state of New Hampshire losing out on $90m annually straight away.
Basis for the 2019 directive
The DOJ decided on the new directive for the Wire Act in 2018. The details were made public in January 2019, and it took most parties in the country’s gambling sector by surprise.
The directive put in place a 90-day deadline for gambling operators to comply with a stricter interpretation of the 2011 DOJ directive. This earlier charge maintained that only sports betting was not allowed across state lines. However, the 2019 directive states this is now the case for all forms of gambling.
Lawyers expose major flaws
Many state-run lotteries in the US utilize technology that has servers in other states. There are also multi-state lotteries such as Mega Millions and Powerball to consider.
The New Hampshire Lottery’s legal representatives are arguing that, as per industry regulations, duplication locations are required for lottery servers. These servers are placed in different states to ensure that the lottery is not compromised by events such as natural disasters. Not allowing such servers would result in a 25% drop in current lottery sales.
The attorneys used harsh language to describe the latest directive. They said,
The 2018 Opinion’s interpretation of the Wire Act is tortured, unnatural, and unpersuasive.”
The legal team wants to ensure there is no remaining cloud of uncertainty over the lottery’s operations going forward, as this would affect future revenues, expansion options, and business relationships.