New Hampshire Federal Judge Rules Against DOJ: Says Wire Act Only Applies to Sports Betting

Federal Judge’s Ruling May Send the 1961 Federal Wire Act into Peaceful Slumber

Those who follow various forms of online gambling may be thinking we just went back to the future. Sure, the future keeps changing, and most envision a positive final outcome for online gaming, especially sports betting.

However, late last year the US Department of Justice won a measure of control against all forms of online gambling, or so they thought. Last November, the DOJ rendered a proclamation that the Interstate Wire Act of 1961 did not only target gambling on sports, but all games of chance, including lotteries.

Mid-January of this year the acting Deputy Attorney Rod Rosenstein said that any enforcement of this change in DOJ policy would be placed on hold. Exactly one month later on February 15, New Hampshire’s Lottery Commission decided to file a complaint. That complaint went in front of a federal judge in New Hampshire.

Old Laws Old News

The Federal Wire Act was created with a specific target in mind. There was a growing problem with organized crime generating millions of dollars in ill-gotten revenue from illegal sports betting operations. Most of these transactions were handled over the telephone or by telegram.

To make it a federal crime was simple. Entice lawmakers to write legislation that made it illegal to conduct any type of transaction over the wire or the telephone and via telegrams to be specific. No one in 1961 envisioned the technological boom called the internet.

With the internet came a new-era of online capabilities. Naturally, law enforcement encompassed any activity conducted via the internet to fall under this legislation. It certainly opened a wide-ranging scope of questions.

The DOJ said it was all rather simple, according to them. Business carried out over the internet fell under the jurisdiction of this law. Online casinos, poker games, and especially off-shore sportsbooks, were deemed a violation of US federal law.

It would seem that the November decision by the DOJ pushed the envelope a little too far. States have been feeling the financial benefits of various types of lotteries for decades. This recent opinion deemed any online lottery sales as a violation of the 1961 law. State’s thought otherwise, and New Hampshire was the first to step into the ring.

New Ruling New Direction

Earlier this week, New Hampshire threw a proverbial legal haymaker. A federal judge told the Department of Justice, not so fast. One factor was certainly given heavy significance. It was the fact that roughly a decade ago the DOJ told New York and Illinois that the Interstate Wire Act did not apply to their online lottery ambitions.

They insisted that the law was designed to focus on sports betting, not other games of chance like lotteries. Certainly this must have been a factor in the Tuesday decision. Legal matters of precedence do carry a lot of weight in the courtroom.

It actually astonished many in the legal community when the DOJ decided to essentially reverse course back in November. The Deputy Attorney General gave states 90-days to adjust to the new decision. What it actually did was give states like New Hampshire a chance to load up for a knockout punch.

It took New Hampshire exactly one month to officially dispute the change, and just over three months for a judge to proclaim all states as winners of this round. But, it may have done way more than that.

This ruling clearly points out an apparent mistake in judgment by the DOJ. Why would they suddenly alter the way they dealt with lottery games and online casinos, essentially without warning? This new direction would have targeted multi-state massive lotteries such as Powerball as well.

What Tuesday’s admonishment of DOJ policy did was potentially send the whole online gaming question in a totally new direction. This would certainly be cause for sportsbooks to pop open a bottle of bubbly as well.

This ruling made it clear that there needs to be a debate about the meaning of a piece of legislation more than a half-century old. The act had a primary purpose of dealing with a dangerous criminal element.

It will be difficult for the DOJ to paint online sportsbook and casino operators as surly members of a crime family. This single ruling, won by a state lottery commission, will and rightfully should expand the whole sports betting debate.

For now, that debate will be focused on why the Federal Wire Act of 1961 should be acclaimed for what it did successfully accomplish in that era. However, the internet ushered in a new era. It means it’s time that federal law went in a new direction. Tuesday’s ruling may ultimately send the 1961 Federal Wire Act off into peaceful slumber.