Powerball Tops $414 Million, But Wire Act Could Jeopardize Future Lotteries

Written By Nicholaus Garcia on March 8, 2019

No one won the Powerball drawing on March 6, making the Saturday, March 9 Powerball drawing expected to be worth $414 million, according to CBS Boston.

With the nine-figure jackpot–and a cash option estimated to be $247.9 million–Americans are lining up to purchase tickets. (The jackpot last hit on Dec. 26, 2018.) Customers in 44 states and Washington, D.C., can purchase tickets for $2. Additionally, customers in Puerto Rico and the US Virgin Islands can also participate.

But amid the excitement, there’s a looming worry. Future Powerball jackpots could be in jeopardy should the Department of Justice (DOJ) state begin to flex its muscle on state lotteries. The recent Wire Act opinion by the DOJ could make domestic lottery products susceptible to more regulation.

The Powerball lottery and others are susceptible to the Wire Act opinion

In December, Mark Hichar, an attorney with Hinckley Allen, told Legal Sports Report, lotteries have to worry.

“A reversal of the 2011 opinion could affect state lotteries where their product purchases cross state lines,” Hichar said. “Either due to the way communication networks are set up or because they have processing centers out of state.”

Here is more from Hichar:

“The 2011 opinion came about as a result of petitions filed in 2009 by the New York and Illinois state lotteries, and they listed in their petitions a number of state lotteries that — at the time — used out-of-state equipment to process ticket purchases. So I would think that states with lotteries in such a situation would seek to enjoin enforcement.”

The crux of the DOJ opinion is the Wire Act applies to all forms of interstate gaming, not only sports betting.

What happens with the Wire Act now?

Recently, the New Hampshire Lottery filed suit in federal court against the DOJ in an attempt to stop it from enforcing its opinion on state lotteries.

New Hamshire Gov. Chris Sununu said, “New Hamshire is taking action to protect public education–the opinion issued by the DOJ puts millions of dollars of funding at risk, and we have a responsibility to stand up for our student.”

It must be clear; the opinion does not carry the force of law. The opinion is “guidance” for the DOJ and is viewed as a blueprint when pursuing related cases to the Wire Act.

However, it has worried stakeholders in the gaming sector, including state lotteries whose products often cross state lines.

Lotteries are safe for now

First reported by Online Poker Report on March 5, the “DOJ officially extended its non-prosecution period for its revised Wire Act opinion” an additional 60 days.

DOJ officials had planned to take legal action on all states that were in non-compliance by April 15.

According to a new memo signed by Deputy Attorney General Rod Rosenstine, the deadline has been extended to June.

“We have decided to extend that window an additional 60 days (through June 14, 2019). Providing this extension of time is an internal exercise of prosecutorial discretion and does not create a safe harbor for violations of the Wire Act,” Rosenstine wrote.

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Nicholaus Garcia

Nick has had stints in Chicago and Washington, D.C., writing about politics, financial markets, and sports betting. He graduated from Texas Tech University and completed his master's degree in journalism at Columbia College Chicago.

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