Feds continue fight against online betting, threatening lottery sales

Monitor staff
Published: 8/19/2019 3:58:58 PM

The federal government has doubled down on its opinion that selling lottery tickets online is an illegal form of gambling, a move that could threaten $6 million annually in New Hampshire lottery sales – or possibly much more.

“It depends on the interpretation. The Justice Department never said, here’s what we mean by this,” said Charles McIntyre, executive director of the New Hampshire Lottery Commission.

The decision by the Department of Justice to take the issue up to the federal appeals court level also throws into confusion the development of online sports betting in New Hampshire.

A state law passed this year legalizes betting on professional sports and most Division I college sports, excluding games involving New Hampshire schools, with mobile betting allowed and retail gambling at 10 locations. New Hampshire Lottery is soliciting proposals from potential online vendors and retailers. By one estimate, the wagering could produce $7.5 million for education in fiscal year 2021.

The situation dates back to November when the Trump Administration handed down a surprise ruling about a 48-year-old law called the Wire Act.

The Wire Act had long been seen only to forbid sports betting across state lines, a position reinforced by a Justice Department memo in 2011. The November ruling from the Office of Legal Counsel for the federal Department of Justice said the Wire Act actually applies to any operation that sends information over phone lines or the internet as long as they are “assisting in the placing of bets or wagers.”

That decision apparently would prevent purchasing multi-state lottery tickets online and possibly make it impossible to sell them at all.

“If it is interpreted narrowly, it (affects) $6 million in sales last year. If you mean everything we sell that goes over the internet in some way, then it’s everything,” McIntyre said. He gave an example: “Every Wednesday and Saturday we all confirm how many tickets we sold over Powerball, and that’s done nationally. That might be considered transactions over the internet across state lines, and also problematic.”

New Hampshire and several other states sued in response to November’s decision by the Office of Legal Counsel for the federal Department of Justice. The move created “absurd and impractical results,” the state urged in court filings.

In June, U.S. District Court Judge Paul Barbadoro in Concord agreed with them, saying the Justice Department misinterpreted the 1961 law that had been passed by Congress.

“Based on the text, context, and structure of the Wire Act, I also conclude that the Act is limited to sports gambling,” Barbadoro wrote as part of a 63-page order.

But Friday afternoon, the federal Department of Justice said it would challenge that ruling in the First Circuit Court of Appeals in Boston, meaning the battle is not over. New Hampshire is expected to take part in the legal dispute.

That appeal isn’t a surprise. Barbadoro said in June that he expected the matter to end up, eventually, before the U.S. Supreme Court.

The 1961 Wire Act was passed by Congress as part of attempts to attack organized crime. Written long before the internet was developed, it targeted sports betting in which information was sent across phone lines or other landline technology – hence the “wire” in its name. Later court rulings have agreed that this includes the internet, including wireless broadband.

As is often the case in legal fights over legislation, part of the debate about the law comes from grammatical uncertainty.

In a long paragraph describing what the law covers, the 1961 Wire Act first mentions “information assisting in the placing of bets or wagers on any sporting event” and later talks about “the transmission of a wire communication … for information assisting in the placing of bets or wagers.”

A major question is whether the word “sporting” carries throughout the entire paragraph even though it is not repeated in later phrases. If not, then the second phrase might concern all bets and wagers, even those that don’t involve sports, such as buying a lottery ticket.

(David Brooks can be reached at 369-3313 or dbrooks@cmonitor.com or on Twitter @GraniteGeek.)

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