As much as New Jersey serves as a “hero” for other states with legal sports betting, New Hampshire could now be heroic for other forms of online gambling.
The New Hampshire Lottery has again secured victory in its Wire Act lawsuit against the US Department of Justice.
With that branch of the federal government under new leadership, this could be the end of the dispute altogether. That means a much more optimistic and secure future for gambling companies and their vendors across the country.
The latest on the NH Lottery Wire Act lawsuit
As the nation awaited the inauguration of President Joe Biden, the First Circuit Court of Appeals was busy on this matter. The court on Tuesday denied the DOJ’s appeal of a lower court ruling, as indicated in a tweet by Jeff Ifrah, a lawyer affiliated with the plaintiffs.
And we win! The 1st Circuit upholds the District Court's Opinion and rejects the OLC's opinion. The 1st Circuit holds that the Wire Act only (and obviously) applies to sports events and contests! Big Win! @iDEA_Growth #sportsbetting #wireact
— Jeff Ifrah (@jifrah) January 20, 2021
As Ifrah noted, the circuit court agreed with the district court’s interpretation of the Wire Act of 1961. The decision shouldn’t come as a surprise. Earlier hearings at the circuit court on the matter did not go well for the DOJ.
The court’s decision invoked a very literal reading of the act. That interpretation means that while online sports betting across state lines remains illegal, the DOJ can’t prosecute gambling companies for offering other products across those lines.
It’s a significant win for the NH Lottery. However, gambling companies everywhere are celebrating. Products like online lottery, online poker and online casinos (including slots and tables games) become much more doable in states looking at gambling expansion.
Why this is a big deal for more than just the NH Lottery
The two segments of the gambling industry likely breathing the biggest sighs of relief right now are the Multistate Lottery Corporation and online poker sites. This news has more immediate relevance for online poker, though.
Online poker is the least lucrative of the internet gambling trifecta of casino, poker and sports betting. But having player pools from multiple jurisdictions evens out that playing field somewhat. States like Delaware, Nevada and New Jersey already have existing pacts.
If the First Circuit had ruled in the defendants’ favor, executing those pacts could have been a riskier prospect. The same goes for the future of multistate lottery games such as Mega Millions and Powerball.
In theory, the MLC could soon expand internet sales to more jurisdictions. That’s subject to state laws. Although the cessation of this dispute could motivate more states to authorize online sales.
That might especially be true if lotteries in states with online sales start selling their own products across state lines as well. That’s still somewhat up in the air, as this lawsuit isn’t completely put to bed just yet.
So what might happen now?
Essentially, the DOJ has a decision to make. It can either accept this ruling or appeal its loss to the US Supreme Court. It looks like the DOJ might be more inclined to embrace the First Circuit’s reading of the Wire Act for several reasons.
First, the new attorney general may drop the matter. Biden’s nominee, Merrick Garland, has a reputation for deferring to agencies’ precedents. Before 2018, the DOJ had held that the Wire Act only applied to sports betting. The new interpretation that tried to expand enforcement was an invention of the Trump administration.
Even if Garland’s department should press the matter, there’s no guarantee that the Supreme Court would grant the appeal. One of the primary reasons for Supreme Court review is circuit courts’ disagreement on matters.
In 2002, the Fifth Circuit Court of Appeals also held that the Wire Act only applies to sports betting. Without dissidence on the pivotal issue, the Supreme Court could opt to deny certification of Justice’s request.
Even in the unlikely event that the DOJ pushes and the Supreme Court grants cert, another court upholding the prevailing ruling seems likely. The DOJ’s case was built on a flimsy reading of the act and failed to ever substantiate how it was in the best interest of the people of the country for Justice to police online gambling more broadly.
The bottom line is that the NH Lottery has probably won this dispute, with a serious degree of finality either now present or coming eventually. When other states are able to cash in on interstate online gambling, they should thank New Hampshire.