Good news for online gambling advocates came last week from a federal judge in New Hampshire.
Judge Paul Barbadoro decided the Department of Justice could not dodge a legal challenge to its latest Wire Act interpretation. At least, not by simply issuing a last-minute memo claiming the opinion doesn’t apply to state lotteries.
What that means is that the New Hampshire Lottery Commission‘s action against the DOJ is moving ahead. Plus, the casino industry gets to keep its most powerful ally, at least in its fight to prove this opinion isn’t much more than payback to an anti-online gambling zealot. (One that might possibly be on his last legs.)
Sheldon Adelson raises a stink
In case you missed the recent Wire Act drama, this whole thing started back in 2011. That’s when the DOJ issued the opinion that the Wire Act applies only to sports betting. This opened the door for various state lotteries to launch online sales. Plus, it gave others the idea they could legalize online gambling in fenced-in markets without interference from the feds.
What they didn’t count on was Las Vegas Sands Corporation CEO Sheldon Adelson raising such a stink. They didn’t count on him funneling so much into various Republican party campaigns that when he got sick and called in a favor, the DOJ might be forced to throw him a bone.
That bone came in the form of a new interpretation of the act. But significantly, it’s one that reversed the 2011 opinion and suddenly claimed the Wire Act applies to all forms of online gambling. This is particularly if it gets anywhere near to crossing state lines, even only technically.
Of course, the Wall Street Journal published an article in January proving the opinion might not be DOJ’s alone. In fact, it suggests it is the very same one an Adelson-backed lobbyist sent the DOJ a few years ago.
Additionally, the Washington Post talked to that lobbyist a few days later. Washington attorney Charles Cooper, the previous head of the DOJ’s Office of Legal Counsel, confirmed it looks a lot like the opinion he wrote.
However, strong opposition to the opinion mounted fast. So fast that DOJ officials could do little more than issue a statement claiming accusations the opinion was shaped by outside interests are “baseless and offensive.” Then the DOJ started strategizing how to defend this thing in court.
Facing this New Hampshire Lottery Commission lawsuit, what they came up with was an April 8 memo from Deputy AG Rod Rosenstein claiming the DOJ never concluded that lotteries are impacted by the new opinion.
DOJ memo fails
Unfortunately for the DOJ, this feeble attempt to scuttle the federal case failed.
Judge Barbadoro ruled that the memo hardly provides sufficient grounds for dismissal of the case.
He stopped short of granting the New Hampshire Lottery Commission’s biggest ask: an immediate ruling that the Wire Act only applies to sports betting, does not apply to states, and the new opinion is invalid.
The truth on the Wire Act is out there
However, that’s still good news for online gambling advocates. It means that the New Hampshire Lottery Commission’s case is going ahead. Plus, the DOJ’s latest opinion on the Wire Act will have to face the increased scrutiny of a federal case against it.
That likely means that somewhere down the line, someone from the DOJ will have to admit the truth in open court about where the opinion comes from. Unless of course, they simply decide to back off of it first and let the growing US online gambling industry go about its business.