Wire Act case heads to the Court of Appeals

  • The U.S. Court of Appeals of the First Circuit is now hearing an appeal from the Department of Justice on the case of New Hampshire Lottery Commission, et al v. Barr, et al.
  • The case will determine the scope of the Wire Act and whether it applies solely to sports betting or if it prohibits all forms of interstate gambling.
  • Arguments so far have been largely semantic, but the final decision in this case will have a massive impact on online gambling throughout the United States.
  • Regardless of the result in the Court of Appeals, the case has high odds to make its way to the Supreme Court.

WASHINGTON – The case of New Hampshire Lottery Commission, et al v. Barr, et al has now reached the United States Court of Appeals for the First Circuit. The final decision, in this case, could have a wide-reaching effect on the legality of online gambling throughout the country.

The appeal stems from an opinion issued by the Office of Legal Counsel (OLC) in 2018 stating that the Wire Act of 1961, which prohibits the interstate transmission of betting or wagering information, applies to all forms of online gambling, not just sports betting.

Thursday’s arguments, held via teleconference because of the ongoing coronavirus pandemic, were largely semantic, with the Court’s three judges considering the exact wording and syntax of both the Wire Act’s original text and that 2018 OLC opinion.

If applied unilaterally, this interpretation of the Wire Act could criminalize things like multi-state online poker, online lottery ticket sales, and more.

The New Hampshire Lottery Commission (NHLC) won its case in a lower federal court in 2019, but the Department of Justice (DOJ) appealed the decision.

The DOJ’s appeal is centered around the fact that the 2018 OLC opinion does not directly threaten enforcement actions against online lotteries. The entire case borders on pedantic frivolous, but could have a massive impact on online gambling in the United States.

How Will This Case Affect The Wire Act?

A 2011 OLC opinion ruled that the Wire Act only applied narrowly to sports betting. This opinion and the one issued in 2018 appear to be irreconcilable.

This case is likely to reach the Supreme Court, so the final verdict will likely be the definitive opinion on the scope of the Wire Act and whether it solely applies to sports betting or if it prohibits all forms of interstate online gambling.

If the Court sides with the NHLC, nothing will change. If it sides with the DOJ, it could severely restrict online gambling options for other types of betting.

New Hampshire offers online lottery ticket sales and also recently launched a statewide online sportsbook in partnership with DraftKings. The final verdict in this case could prohibit it from offering multi-state lottery games like the Powerball or Mega Millions.

As online gambling continues to evolve and cement itself throughout the United States, a broad interpretation of the Wire Act could stifle the industry, especially companies that operate in multiple states.

Why Is The Wire Act Still Relevant?

The Wire Act was written well before the advent of the internet during a time where most gambling was closely tied to organized crime.

Criminal enterprises would position agents in one state to transmit the results of sporting events across state lines before oddsmakers had access to the same information. Today, sportsbooks and bettors alike have access to more or less real-time information.

But removing a law from the books is difficult, especially a law governing a topic as contentious as online gambling.

The Wire Act is unlikely to be repealed any time soon, so its effect on legal sports betting and gambling is dictated by its legal interpretation.

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