New Hampshire Lottery Commission and NeoPollard Interactive Respond to DOJ’s Refusal to Determine Wire Act Applicability to State Lotteries as Requested by the Court

Last week the U.S. Department of Justice (DOJ) refused to rule out future prosecution of state lotteries and their employees and vendors under the 1961 Wire Act. “The potential Wire Act liability of state agencies, employees, and vendors involves the evaluation of numerous complicated and important issues, and the department intends to give these issues the deliberate consideration that they deserve,” DOJ attorneys said in a 12-page supplemental brief submitted on April 25 to U.S. District Judge Paul J. Barbadoro in Concord, New Hampshire.

The brief repeated the DOJ’s vow not to prosecute state lotteries and their employees while the department’s review of the Wire Act continues. For this reason, the DOJ brief argues, a lawsuit by the New Hampshire Lottery Commission and its internet lottery vendor, NeoPollard Interactive, should be dismissed. “The court lacks jurisdiction to resolve at this time not only whether the Wire Act reaches beyond sports gambling generally, but also whether the Wire Act could ever be applied to state lotteries and their vendors or employees, as there is no present credible threat of prosecution,” the DOJ brief said.

Most of the DOJ’s brief doubles down on the argument that employees and vendors of lotteries can be prosecuted even if they are carrying out their official duties. “Absolute immunity has been extended to only a very limited class of officials — the President, legislators carrying out legislative functions and judges carrying out judicial functions,” the DOJ brief said. The DOJ was responding to another 12-page brief submitted on April 18 by the New Hampshire Lottery Commission, which argued that state employees and vendors are immune from prosecution. “So long as the [New Hampshire Lottery Commission’s] officials and employees are acting in their official capacities pursuant to valid state law, and are not acting unconstitutionally, they enjoy the state’s sovereign status, act as the state, and are not subject to [the Wire Act’s] prohibitions,” attorneys for the New Hampshire Lottery Commission argued in their brief.

On May 2, in response to the DOJ’s refusal to decide whether the Wire Act applies to state lotteries and their vendors, reply briefs were submitted by the New Hampshire Lottery Commission and NeoPollard Interactive. The internet lottery vendor stated in its brief that the refusal by the DOJ will force those businesses to continue operations under a 2011 DOJ opinion instead of a new opinion drafted last November.

The New Hampshire Lottery Commission’s brief disputes the DOJ’s claim that lotteries, as well as their vendors and employees, can be prosecuted under the Wire Act. The brief said, to prohibit states and their agencies “from using the wires to operate state lotteries [would be] a result Congress did not intend and that is not consistent with the text, structure, purpose, and legislative history [of the Wire Act].”

Judge Barbadoro is expected to issue a ruling by the end of this month and has already acknowledged that the case is destined for the U.S. Supreme Court.
If you have questions regarding this case, please contact authors Karl Rutledge at krutledge@lrrc.com, Glenn Light at glight@lrrc.com, or Mary Tran at mtran@lrrc.com.