June 7, 2019

sports-gambling-law
Sports Gambling Law Ruling

In a significant development in the world of sports gambling law, the United States District Court for the District of New Hampshire has ruled against the Department of Justice (“DOJ”), striking down its recent opinion concerning the Wire Act’s application beyond sports betting.

Why did the Court strike down the Wire Act Opinion letter?

Readers will recall from our previous blog detailing the import and anticipated impacts of the DOJ’s Wire Act opinion letter that state iLotteries were among the parties that were likely to be adversely affected by the DOJ’s policy reversal.  Unsurprisingly, the New Hampshire Lottery was among the first parties to challenge the propriety of the DOJ’s Wire Act interpretive changes.  The State Lottery was concerned about prosecutions related to its gaming operations (which involve interstate transmissions of data) and sought Court intervention prior to expiration of the DOJ-instituted policy enforcement grace period.  In bringing suit against the DOJ, New Hampshire argued that it was entitled to a declaratory judgment that the Wire Act does not apply to state-conduct lottery activities and an order vacating the DOJ’s Wire Act opinion letter in its entirety.

In reaching its conclusion that the DOJ’s Wire Act opinion letter misconstrued the application of the Wire Act (by determining that the statute’s criminal prohibitions are not solely limited to sports gambling), the Court engaged in a lengthy exercise in statutory interpretation.  The Court examined legislative history, related federal laws, and the statutory scheme of the Wire Act as a whole.  Ultimately, the Court ruled that, despite the ambiguous language contained in the Wire Act, the only logical interpretation of the statute dictates that its prohibitions are limited to sports gambling and do not extend to non-sports-related gambling activities (including iLotteries).  In so ruling, the Court stated that “a careful, contextual reading of the statute supports the view that [its prohibition] applies only to sports gambling.” As a result, the Court set aside the DOJ’s Wire Act opinion letter in its entirety.

The Continuing Evolution of Sports Gambling Law

It is likely that the DOJ will appeal this ruling to the First Circuit Court of Appeals.  Notwithstanding the DOJ’s decision on whether to appeal, the regulatory landscape for sports gambling continues to shift in the short period of time since the United States Supreme Court struck down Professional and Amateur Sports Protection Act (“PASPA”).  As more states undertake efforts to legalize sports gambling, and as mobile and online sports gambling becomes more prevalent, it is critical that those business operating in the space work closely with gaming law attorneys to ensure compliance with applicable law.

If you are interested in learning more about this topic or need to review your sports gambling operations, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

The material contained herein is provided for information purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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Federal Sports Gambling Bill Expected Soon

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