DOJ States Lotteries Not Impacted by Wire Act Reinterpretation

Summary: US Department of Justice releases new memo stating lotteries are not affected by the new interpretation of the Wire Act.

When the United States Department of Justice announced that the Wire Act was being reinterpreted to include all online interstate gaming, several states began to panic. States that offered lottery gaming were worried that such games as the Powerball and Mega Millions would place their industries at risk. It seems the DOJ is now revealing that state lotteries are not impacted by the Wire Act reinterpretation, a change that could cause a federal court case against the DOJ come to an end.

New Memo

Online LotteryThe DOJ released their latest filing to the public, with the memo signed by Deputy Attorney General Rod Rosenstein. In the memo, the Deputy AG comments on the Office of Legal Counsel opinion that was provided earlier this year.

In the memo dated April 8th, Rosenstein states that the DOJ did not conclude that the state lottery groups are impacted by the new reinterpretation of the Wire Act, a decision that replaced the 2011 opinion.

It is believed that this memo was created in which to shutdown a federal case against the DOJ brought to life by the state lottery in New Hampshire. The scope of the Wire Act now seems to focus on online gambling, but not lottery gaming.

It is unclear how the Department of Justice can call other online gambling games different than the lottery, as the games do have an interstate component. The New Hampshire Lottery brought their case against the DOJ due to the face that multi-state lottery games exist. Data crosses state lines and payments are often interstate as well. These components would fall under the interstate gambling category as stated by the DOJ in their new ruling.

In the new memo, the Deputy AG did say that the Department of Justice is now reviewing the question as to whether or not the Wire Act applies to the state lotteries and vendors associated with the industry. Attorneys of the DOJ are to refrain from applying legalities to the state lotteries and vendors until the review has been completed.

Case Moving Forward

For now, it is unclear as to if this new memo will affecting the pending case against the DOJ involving the Wire Act. A decision in the case was set to take place in May, but if that is still the case, it is unknown. If the judge in the case chooses to dismiss the case, a state or other entity could choose to bring the case to a different federal court in the US. The DOJ could also find that the Wire Act does apply to lottery gaming and the case would start again.

It will be interesting to follow along and see how the case and the Wire Act reinterpretation go from here. For over five years, real money online gambling has thrived both in state and across state lines in the US. It seems foolish to back track after New Jersey, Delaware and Nevada have been successful. Pennsylvania has now passed legislation set to start their new online industry this year and West Virginia recently passed legislation as well.

Hopefully the industry will be able to continue as is and more states will get in on the action in the future.