After nearly twenty years of conflicting opinions on the scope of the Wire Act’s application, the First Circuit’s decision provides greater clarity for states that rely on lottery profits to fund critical state programs.The Wire Act& the DOJ’s Shifting ApplicationThe Wire Act, 18 U.S.C § 1084, was enacted in 1961 as part of then-Attorney General Robert F. Kennedy’s campaign against organized crime. Section 1084(a) specifies what conduct the Wire Act criminalizes.

Three Point Shot brings you the latest in sports law-related news and provides you with links to related materials.Edited by Robert E. Freeman"Win-Time" for the Online Gaming Industry in Wire Act Ruling"Luck Yeah!" The New Hampshire Lottery Commission ("NHLC"), along with its service providers, NeoPollard Interactive LLC and Pollard Banknote Limited (collectively, "NeoPollard"), recently prevailed against the U.S. Department of Justice ("DOJ"), when the U.S. Court of Appeals for the First Circuit affirmed a narrow reading of the Wire Act, 18 U.S.C.§ 1084, to apply only to interstate transmissions related to bets or wagers on sporting events and not to the state lottery and online gaming operations of NHLC. (New Hampshire Lottery Comm. v. Rosen, No. 19-1835 (1st Cir. Jan. 20, 2021)). This victory represents a huge win, not just for NHLC and NeoPollard or even the 47 other state-run lotteries, but for the online wagering and online gaming industry (and their technology providers), all of which might now look for new opportunities and partnerships given that Wire Act enforcement of their gaming and lottery products is off the table.

This opinion clarified the interpretation of the Wire Act to specifically hold that its prohibitions did not apply to lotteries, or other non-sports forms of wagering. Thus, the 2011 Opinion opened the doors to interstate Internet wagering on games like slots, table games, and poker.However, in November 2018, the DOJ issued the 2018 Opinion, reversing the position articulated in its 2011 Opinion and concluding that the Wire Act does in fact apply to forms of wagering other than sports wagering.Per the 2018 Opinion, the DOJ construed 18 U.S.C. § 1084(a) as establishing four distinct types of prohibited conduct, specifically, barring persons in the gambling business from knowingly using a wire communication facility in interstate or foreign commerce:to transmit bets or wagers;to transmit information assisting in the placing of bets or wagers on any sporting event or contest;that entitles the recipient to receive money or credit as a result of bets or wagers; and,for information assisting in the placing of bets or wagers.The DOJ asserted that the limitation “on any sporting event or contest” in the second prohibition does not sweep backwards or forwards to limit the other prohibitions.

The decision – which almost certainly will be appealed – represents a resounding victory for state lotteries, the gaming industry and their service providers and a stinging defeat for the DoJ’s prestigious Office of Legal Counsel, which placed its considerable credibility on the line in deciding to reverse its prior position under circumstances that many observers attacked as politically motivated.The Issue Before the CourtThe issue in the case involved statutory interpretation of the Wire Act, which prohibits those “in the business of betting or wagering” from, “knowingly us[ing] a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or content, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers . . . .” 18 U.S.C. § 1084(a).Until January 2019, the Wire Act had been construed as only applying to gambling on sports events or sporting contests.

On January 14, 2018, the U.S. Department of Justice expanded restrictions on online gambling, publicly releasing a November 2, 2018 opinion (the “Opinion”) from its Office of Legal Counsel. The opinion reversed DOJ’s previous guidance from 2011 that interpreted the prohibitions of the Wire Act, codified at 18 U.S.C. § 1084(a), as only applying to sports-related gambling. DOJ’s Opinion found that, contrary to its prior analysis, the language of the Wire Act was clear, such that all but one of its prohibitions extends beyond sports betting.

The DOJ may still appeal the court’s decision, but for now, this decision provides some clarity in the law regarding the Wire Act’s applicability to non-sport-related gambling. The Wire Act (18 U.S.C. § 1084) prohibits anyone “engaged in the business of betting or wagering” from knowingly transmitting several types of wagering-related communications across state lines. In particular, section (a) of the Wire Act consists of two clauses.

Over the weekend, a draft of the “Internet Gambling Control Act” surfaced on the internet. This proposed legislation, attributed by industry websites to the Coalition to Stop Internet Gambling, seeks to expand the scope of The Wire Act (18 USC § 1084) to affirmatively prohibit Internet gambling. Speculation is that Mr. Sheldon Adelson, the international casino magnate and Chairman / CEO of Las Vegas Sands, is backing the Coalition.

Notably, the NFL expressly pointed out that it found “no evidence indicating any inside information was used or that any game was compromised in any way,” demonstrating the League’s primary concern is public perception of the integrity of the game. College athletes from Boston College, Arizona State, Auburn, Maryland, Toldeo, University of San Diego, and Tulane, among others, also have run into trouble for betting on sports. Well-known professional athletes in the NBA and on the PGA Tour also have been rumored to have gambling issues and even secret suspensions from play. NBA referee Tim Donaghy was caught and sentenced to fifteen months in federal prison for his role in fixing NBA games in the 1990s and early 2000s.Indeed, despite the Murphy decision, many aspects of sports gambling are still illegal with the common theme of preventing unwelcome intrusions by interstate or international gambling businesses into states that otherwise prohibit gambling. For example, under the Wire Act, 18 U.S.C. § 1084, conducting a gambling business that makes use of interstate wire communication facilities to place wagers across state lines or to assist in placing such wagers is a federal crime, unless such betting is legal in both the state where the bet originated and the state where the bet was placed. See United States v. Cohen, 260 F.3d 68 (2d Cir. 2001).Other federal gambling laws include the Illegal Gambling Business Act, 18 U.S.C. §1955 (prohibiting interstate gambling businesses that are unlawful in the state where conducted) and the Unlawful Internet Gambling Enforcement Act, 31 U.S.C. §§ 5361-67 (expressly addressing Internet-based gambling by outlawing accepting payments related to Internet gambling that is illegal in the place where the wager is placed, received or transmitted). The U.S. Department of Justice also prosecutes gambling under the Travel Act, 18 U.S.C. §1952, when interstate commerce is used to conduct an illegal gambling business, under the RICO laws, 18 U.S.C. §1962, wh

Post-Trump, and with the recent passing of GOP mega-donor and staunch online gambling opponent Sheldon Adelson, a DOJ appeal seems less likely.The Wire ActThe Wire Act, 18 U.S.C. Section 1084, was enacted in 1961 to assist states in enforcing their gaming laws and to suppress organized gambling activities across state lines. The statute contains two provisions.

_______________1 Press Release, FTC, FTC to Hold August Workshop on Consumer Issues Related to Loot Boxes (Apr. 5, 2019).2 See below for a discussion of the narrow exceptions to this general principle.3 See, e.g., Letter from Sen. Margaret Wood Hassan, D-N.H., to Patricia Vance (Feb. 14, 2018); Senator Hawley to Introduce Legislation Banning Manipulative Video Game Features Aimed at Children, Josh Hawley (May 8, 2019).4 See, e.g., 18 U.S.C. §§ 1084, 1955; 31 U.S.C. § 5362; Cal. Penal Code § 330b (California law); 720 Ill. Comp.