New Hampshire Lottery Prepared to Sue Feds over Wire Act Reinterpretation, as US AG Whitaker Denies Corruption

Posted on: February 11, 2019, 07:43h. 

Last updated on: February 11, 2019, 07:43h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

New Hampshire lottery officials have said they are prepared to sue the federal government if needed to protect the revenues the state derives from online ticket sales.

The declaration comes as Acting US Attorney General Matthew Whitaker on Friday vowed that “nothing corrupt” had occurred when the Department of Justice revised its opinion of the Wire Act in a way that could stymie online gaming in the US.

The DOJ has been accused of kowtowing to Republican megadonor and casino mogul Sheldon Adelson, a man who once said he would “spend whatever it takes” to see regulated online gaming wiped off the face of the earth.

In January, the DOJ broadened the scope of the Wire Act to say it forbids all forms of online gambling across state lines – not just sports betting — reversing a 2011 opinion that paved the way for online gaming and lotteries.

Impact on Lotteries

New Hampshire?Lottery Executive Director Charles McIntyre told The Union Leader that its “very narrowest interpretation,” the new opinion could cost the state around $4 to $6 million this year and $6 million to $8 million next year — money that goes to funding education in the state.

We went forward [with online lottery] with the best of intentions believing that all of this would be allowed and that’s what is so troubling about this development,” said McIntyre, adding that he had spoken with Governor Chris Sununu and Attorney General Gordon J. MacDonald about the matter.

“This is a serious enough threat to a major revenue source that I wanted them to be aware of it and to discuss what our options are,” he said.

Most regulated online gambling in the US occurs on an intrastate level, but — taken at its strictest interpretation — the opinion could mean that anything that crosses state lines through the intermediate routing of data could be deemed illegal, including the transmission of information that is completely incidental to gambling.

A more generous interpretation would at the very least criminalize the Multi-State Lottery and the marketing of lotteries across state lines.

Whitaker Denies Link to Adelson

During a House Judiciary Committee hearing on Friday, Rep. Jamie Raskin (D-MD) asked Whitaker whether he had been involved in the January decision and whether he had ever had any communication with Adelson or his lobbyists.

Whitaker replied he had not, on both counts, before adding, “Your inference that somehow that process was corrupted or corrupt is absolutely wrong and the premise of your question I reject.”

This definitely bears further investigation,” Raskin — who also happens to be a constitutional law professor — told the Huffington Post afterwards. “When and where and by whom remains to be seen.”

Last week, the North American Association of State and Provincial Lotteries wrote to Whitaker to complain of the “substantial detrimental impact” the opinion will have on lottery operations and the billions they generate for good causes.

Separately, New Jersey AG Gurbir S. Grewal and Pennsylvania AG Josh Shapiro appealed to Whitaker to overrule the opinion, calling it “deeply troubling.”