Feds appeal court ruling, $100M in NH Lottery revenue at risk

The U.S. Justice Department is appealing a lower court ruling that preserved all internet sales for state lottery games as being allowed under federal law. Last November the Justice Department issued a rule maintaining internet sales of lottery games had run afoul of the federal Wire Act. Here Gov. Chris Sununu and Debra Douglas, chairman of the state lottery commission, celebrated the $100.7 million raised by lottery sales for public education last year.

CONCORD — Federal prosecutors are asking an appeals court judge to rule that up to $100 million in annual lottery betting in New Hampshire runs afoul of the federal Wire Act.

In a much-anticipated decision, U.S. Attorney General William Barr’s Department of Justice has decided to appeal a U.S. District Court decision in Concord that was hailed as a huge win for the New Hampshire Lottery in June.

The lower court judge, Justice Paul Barbadoro, had predicted this federal-versus-state lottery dispute was likely to go all the way to the U.S. Supreme Court. The Trump administration’s appeal is the first step in that process.

Barbadoro in June ruled the Wire Act applies only to bets or wagers on sporting events or contests — and not online lottery games.

The lottery commission filed a lawsuit in federal court that maintained a federal memo written last November threatened to render illegal all lottery business conducted online, including internet purchases of tickets for games such as Powerball and Mega Millions.

Lottery Executive Director Charles McIntyre said this appeal was expected; he predicted the state would ultimately win in higher courts.

“Judge Paul Barbadoro’s 63-page ruling was thoughtful, comprehensive and most importantly, correct,” McIntyre said in a statement.

“With billions of dollars in critical revenue for education in the balance, Judge Barbadoro’s ruling is clearly consistent with the intent of the law, allowing states to offer legal gaming products to support important causes. We respectfully disagree with the DOJ’s decision to appeal this ruling and we will happily respond and prevail.”

New Hampshire has one of the oldest lotteries in the country and last year it raised $100.7 million in profits given back in state aid to local school districts.

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 DOJ Office of Legal Counsel itself issued an opinion stating that the Wire Act applies to sports betting and therefore is not applicable to lottery sales over the internet.

But the DOJ reversed its past interpretation of the Wire Act and opined last November that the law applied to all betting activities, not just sports betting.

In his decision, Barbadoro disagreed.

“Based on the text, context, and structure of the Wire Act, I also conclude that the Act is limited to sports gambling,” he wrote.

The closely watched case had attracted “friend of the court” briefs from New Jersey, Pennsylvania and Michigan supporting New Hampshire’s legal efforts.

The New Hampshire Lottery Commission offers tickets for multi-state games such as Powerball and Mega Millions that permit tickets to be purchased either in stores or through the internet. Each game involves the use of interstate wire transmissions.

Wednesday, October 23, 2019
Sunday, October 20, 2019