DOJ ‘did not address’ lotteries in Wire Act opinion, Deputy AG Rosenstein says in memo

A new memo from the US Department of Justice says that state lotteries are not at all impacted by the DOJ’s reinterpretation of the Wire Act, a development that could mean the end of a federal court case brought earlier this year.

(See New Hampshire sues DOJ over new Wire Act ruling, Lottery Post, Feb. 15, 2019.)

The latest filing from the DOJ can be found below, including a memo signed by Deputy Attorney General Rod Rosenstein. There, he talks about the Office of Legal Counsel opinion offered earlier this year.

In the April 8 memo, he says the DOJ did not conclude that lotteries are impacted by the new opinion, which replaced the 2011 OLC opinion that stated the Wire Act applies only to sports betting. The newer opinion implies that all forms of interstate gaming are impacted by the Wire Act.

Sources believe this move is an attempt to scuttle the federal case brought by the New Hampshire state lottery and limit the scope of the OLC memo to online gambling that is not conducted by lotteries.

It’s not clear how the DOJ can draw such a line, as many forms of the lottery — from Powerball to online lotteries — have at least an interstate component.

In the case of large multi-state lottery games, that interstate nature is extremely obvious. That is why the NH Lottery brought the case and is supported by a number of other states that have lotteries in the case. Online lotteries — like online gambling and poker — have some amount of data that likely crosses state lines, in addition to payments that are often interstate in nature.

The original 2011 OLC opinion also came at the request of a couple of state lotteries, so the DOJ’s assertion that lotteries were not considered is head-scratching at best.

Wire Act, not for lotteries?

Rosenstein walked back the idea that lotteries are impacted in the memo, which is addressed to the FBI and US attorneys around the country:

On January 15, 2019, I issued a memorandum titled “Applicability of the Wire Act, 18 U.S.C. § 1084, to Non-Sports Gambling,” directing you to refrain from applying Section 1084(a) in criminal or civil actions to persons who engaged in conduct violating the Wire Act in reliance on the 2011 opinion of the Office of Legal Counsel (OLC), and for 90 days after the publication of OLC’s revised 2018 opinion. My memorandum of February 28, 2019, extended the window until June 14 ,2019.

The OLC opinion did not address whether the Wire Act applies to State lotteries and their vendors. The Department is now reviewing that question. Department of Justice attorneys should refrain from applying Section I 084(a) to State lotteries and their vendors, if they are operating as authorized by State law, until the Department concludes its review. If the Department determines that the Wire Act does apply to State lotteries or their vendors, then Department of Justice attorneys should extend the forbearance period for 90 days after the Department publicly announces this position. This would allow State lotteries and their vendors a reasonable time to conform their operations to federal law.

DOCUMENT: Read the full DOJ filing

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