CONCORD — A judge questioned whether the 1961 Wire Act could be used to prohibit states from running online lottery ticket sales, weighing in during a court hearing where two dozen lawyers hung on just about every word he said.
U.S. District Court Judge Paul Barbadoro told a U.S. Department of Justice attorney from Washington that there were no court cases to back up what the Justice Department’s wants the judge to do — dismiss the case brought by the New Hampshire Lottery Commission.
Barbadoro even quizzed Assistant U.S. Attorney Stephen A. Myers about grammatical interpretations and comma placements in the Wire Act.
“This statute is a mess of a statute,” Barbardoro said, noting that people who write laws, a job he had for three years, are not perfect grammarians. Toward the end of an hours long hearing, he said the Lottery Commission case against the Trump Justice Department can proceed. And he gave the Justice Department 14 days to file a memorandum that says whether the Wire Act applies to states and their on-line lottery vendors.
The case pits the New Hampshire Lottery Commission, a vendor for internet ticket sales and lotteries from other states, against the U.S. Justice Department. New Hampshire and other state lotteries worry that the Justice Department may eventually decide that the Wire Act prohibits them from selling lottery tickets such as Powerball and Mega Millions online.
The state estimates it will receive up to $6 million this year and up to $8 million next year through online channels.
Their concern is a November 2018 memo written by the Justice Department, which said it is examining the Wire Act and whether it pertains to internet lottery transactions.
Nearly 20 lawyers sat in the courtroom, representing clients that ranged from Coalition to Stop Internet Gambling and the National Association of Convenience Stores, which sided with the U.S. Justice Department, to the states of Michigan, New Jersey and Pennsylvania, which sided with New Hampshire.
“The 2018 opinion has criminalized my client’s business. We cannot grow, we cannot attract capital,” said Matthew McGill, who represents Pollard Banknote Limited, the company that runs the online lottery operation for New Hampshire.
Myers stressed the Justice Department is only reviewing the legality of the internet lottery operations. On April 8, Deputy U.S. Attorney General Rod Rosenstein wrote that his lawyers won’t prosecute state lotteries or their vendors while the review is ongoing. And it will also hold off on any prosecutions for 90 days after a decision is made.
“We are not threatening to prosecute them now. We are washing our hands of this for the (length of) the review,” Myers said.
He urged Barbadoro to avoid deciding an issue that doesn’t need to be decided.
But New Hampshire’s assistant attorney general and McGill said they need a decision from a judge and don’t want to wait for the Justice Department and the uncertainty the review creates.
Senior New Hampshire Assistant Attorney General Anthony Galdieri noted that state lawmakers are writing a two-year budget based in part on lottery revenues. And McGill said his company could fall under RICO racketeering prosecutions.
For the most part, Barbadoro sided with Galdieri and McGill. But he gave pause when the lawyer representing opponents of internet gambling portrayed the depth of the matter.
“The logical consequence of their position is they can start an online, 50-state internet gambling casino tomorrow,” said David Thompson.
Judges don’t rule from the bench in such complicated cases, and a written decision could be weeks away.
Barbadoro said the issues involved in the case are the most challenging he has seen in his 26 years on the federal bench.
He expects they will end up at the Supreme Court either way he rules.