We devote our entire program to the Wire Act lawsuit against the US Department of Justice! Oral arguments have begun in the case, and the future of online gambling in America could be at stake. The DOJ contends that the Federal Wire Act applies to all forms of gambling, while New Hampshire and fourteen additional states disagree. This week’s special offer is for Heavy Chips casino.
Hello friends and thanks so much for joining me on This Week in Gambling. We have a lot to discuss on our program today. In fact we’re dedicating the entire show to what’s happening with the Wire Act lawsuit, so let’s get right into this week’s big story.
By now I’m sure you know that the New Hampshire State Lottery has sued the US Department of Justice over their recent change of opinion on the Federal Wire Act. An opinion that now believes the Act applies to all forms of gambling, not just sports betting. Originally the DOJ had given States 90 days to comply with their new opinion or else enforcement action would be taken… an obvious attempt to criminalize online gambling in America.
New Hampshire, however, correctly contended that the wire Act only applies to bets placed on sporting events and that the new DOJ opinion was a direct threat to state tax revenue. That’s why they filed their lawsuit… and then 14 additional states piled on! It was at this point that the DOJ was like… oops! Uh… maybe we done messed up! And they issued a memo… yes, a memo… assuring the states that, ‘hey guys, you know… come… on we’re not gonna prosecute a lottery! I mean you know! the DOJ it’s all good! But the states were buying none of it, and the lawsuit began last week.
First, the Justice Department argued that the case should be thrown out because there was no specific and credible fear of prosecution. Yeah, they said that with a straight face in open court after giving the states a 90-day ultimatum to comply… or else. But the judge wasn’t buying what they were selling.
When that didn’t work the DOJ argued the case should be thrown out because there was no specific threat to lotteries! I mean, after all Your Honor, we got a memo! But the judge wasn’t catching what they were shoveling!
You see, back in 2011 it was the lotteries that originally approached the Justice Department and asked for clarification on the Wire Act... it was then that the DOJ said it only applied to sports bets! And that, my friends, is what led directly to states regulating online lotteries, gambling and poker!
So now that the DOJ has changed their opinion they cannot come back and argue that it selectively doesn’t apply to lotteries… memos be damned. In fact when the judge looked at this he said that if you take the new DOJ opinion as is the Powerball could be considered a multi-state criminal conspiracy!
Now at this point you’re probably thinking, hey this sounds pretty good! Things are going our way! And yeah, it was good… but it wasn’t all good. We’re gonna get into that in the second half of our program.
Before we get into the second half of our show and let you know how this all ends, I would ask you a favor: If you’re enjoying this program and would like to help support our channel, please subscribe on YouTube. And when you do, click that bell at the top of the page. That way you’ll get updates whenever we publish new videos.
Okay, so let’s talk about holding and dicta. I… I said holding… and and dicta… not holding “a” dicta. It’s legal terminology and it could have a significant impact on what happens in this case. Basically when a court makes a statement, or gives an opinion on a proceeding, it’s considered dicta… like dictation. It’s just their opinion and it’s not really legally binding. Holding, on the other, hand comes with reasoning about why a legal decision was made by a court, and that is considered legally binding. So keep those two things in mind moving forward.
Now, some of you may remember all the trouble that the United States had with the tiny little nation of Antigua back in 2014 when they tried to enforce the UIGEA. A lawsuit stemmed from that… a lawsuit with an opinion that could come back and bite the DOJ in the ass. In that case, the US vs. Lyons, the court ruled that the Federal Wire Act only applies to sports betting. So, if the judge in this case believed that that decision is holding, well, all of this could be over in our favor very quickly. But so far, it doesn’t look like the judge is leaning that way.
Also the judge in this Wire Act lawsuit case doesn’t seem to believe he has the authority to make a decision about anything other than how this new opinion affects New Hampshire. He’s already alluded to the fact that the other 14 states are going to have to settle this matter in their own jurisdictions. That said many legal experts believe that no matter how the judge decides this case will eventually end up at the Supreme Court. Even the judge himself mentioned that possibility. That’s fine with me! I mean we’ve already taken out PASPA... we might as well kneecap the Wire Act while we’re at it!
So here’s where we are: The judge has decided to force the DOJ’s hand. He has given them 14 days to define exactly how their new opinion is going to be enforced. Now if they come back and say that it doesn’t apply to lotteries, then the Wire Act lawsuit could very well could be thrown out. Here’s the thing though: If the DOJ does come back and say lotteries are exempt, they could be opening up Pandora’s Box! I mean how do you cherry pick what you choose to enforce? How do you say this form of gambling is okay and this form of gambling is criminal? One thing I do know is that there are 14 other states all lined up ready to take a run at the DOJ on this issue. This case is going to illuminate a clear path for them to move forward with that. So come rain or come shine this case isa long way from over.
