Judges William Kayatta and Sandra Lynch of the United States Court of Appeals for the First Circuit ruled in favor of the New Hampshire Lottery yesterday, holding that the 1961 Wire Act does not apply to non-sports betting or wagering activity like state lottery activity. The First Circuit ruling affirms the ruling of the United States District Court for the District of New Hampshire, which ruled in June 2019 the Wire Act applies only to transmissions related to bets or wagers on a sporting event or contest.
“This ruling is a major victory for New Hampshire, ensuring that over $100 million each year continues to flow from the New Hampshire Lottery system in support of public education here in the Granite State,” said Governor Chris Sununu. “New Hampshire stood up, took action, and won. I thank the Attorney General’s Office and the Lottery Commission for their work on this historic case.”
“We are extremely pleased with this ruling, which marks a monumental win for lotteries across the country, as billions of dollars in critical funding for education and other good causes have hung in the balance,” said Charlie McIntyre, Executive Director, New Hampshire Lottery. “We are grateful to Judges Kayatta and Lynch, who together rendered a thoughtful and thorough 49-page ruling that allows the New Hampshire Lottery and lotteries nationwide to continue offering legal gaming products to support important causes. We have remained confident in this outcome from the start and we appreciate the judges’ attention not only to the intent of the law, but also to the extraordinary impact this U.S. Department of Justice opinion stood to have in New Hampshire and nationally.”
The New Hampshire Attorney General’s office, on behalf of the New Hampshire Lottery, had challenged the United States Department of Justice’s November 2018 opinion that the Wire Act applies broadly to all forms of gaming, including sales of lottery tickets over the Internet. The United States Department of Justice had appealed the United States District Court ruling in August 2019.
“We are extremely grateful to New Hampshire Attorney General Gordon MacDonald and his team, who together provided tremendous leadership and expertise throughout this process,” said Debra Douglas, Chairman, New Hampshire Lottery Commission. “As the nation’s first state lottery, we had a responsibility to challenge this Department of Justice opinion and we thank Attorney General MacDonald for building a winning argument that now ensures we are able to continue delivering upwards of $100 million each year in support of New Hampshire education.”
Background
The 1961 Wire Act is a federal law that prohibits the use of wire transmission facilities to place bets or wagers, transmit information assisting in the placement of bets and wagers, or transmit a communication, which entitles the recipient to receive money or credit as a result of a bet or wager.
In 2011, the U.S. DOJ Office of Legal Counsel issued an opinion stating the Wire Act applies to sports betting and therefore is not applicable to lottery sales over the Internet. In November 2018, however, the U.S. DOJ reversed its 2011 interpretation of the Wire Act and found the law applied to all betting activities, not just sports betting. With billions of dollars in lottery funding for education at stake, including more than $100 million annually in New Hampshire alone, the New Hampshire Attorney General’s office, on behalf of the New Hampshire Lottery, challenged the U.S. DOJ opinion in February 2019.
The New Hampshire Lottery noted in its initial filing the U.S. DOJ opinion had far-reaching consequences potentially impacting all aspects of modern lottery operations, not just direct sales over the Internet—all of which threatened the millions of dollars in critical annual revenue the New Hampshire Lottery generates for education in New Hampshire.
The New Hampshire Lottery argued the U.S. DOJ’s opinion was wrong, defeats the purpose of the Wire Act and creates “absurd and impractical results.” Specifically, the New Hampshire Lottery argued the U.S. DOJ opinion was not supported by the language of the law, was inconsistent with binding precedent, and conflicted with other laws, including the U.S. Constitution.
Judge Paul Barbadoro of the United States District Court for the District of New Hampshire ruled in June 2019 the Wire Act applies only to transmissions related to bets or wagers on a sporting event or contest. The First Circuit has now affirmed that decision.
About New Hampshire Lottery
Since 1964, the New Hampshire Lottery has contributed more than $2 billion and counting to education in New Hampshire. For the past 56 years, the New Hampshire Lottery has recorded more than $7 billion in lottery sales and other earnings, with over $5 billion paid in prizes and other cost of sales.
The New Hampshire Lottery Commission, located at 14 Integra Drive in Concord, currently manages all lottery operations in the state, including instant games, New Hampshire Powerball®, New Hampshire Mega Millions®, Tri-State Megabucks℠, Tri-State Pick3®/Pick4® Daily Numbers games, Game 5, Fast Play games, Lucky For Life®, KENO 603℠, and iLottery. The New Hampshire Lottery also regulates charitable gaming, including Bingo, Lucky 7, and Games of Chance, along with simulcast racing, fantasy sports, and sports wagering.