NeoPollard Interactive LLC said in a statement that it is ‘thrilled’ with the decision taken by the First Circuit of the US Court of Appeals confirming the federal Wire Act is limited to sports betting and, therefore, will not affect state-run lotteries.
This decision reaffirms the ruling of the US District Court for the District of New Hampshire in 2019 that was appealed by the US Federal Department of Justice (DoJ).
The ruling is considered important for the US lottery industry as a whole as it alleviates concerns related to the legality of retail or online lottery sales which rely on the transmission of lottery data over the internet.
Liz Siver, General Manager of NeoPollard Interactive, said: “We are very happy with the recent judgement confirming, yet again, the 2011 interpretation of the Wire Act.
“This is a great success for the lottery industry generally, and ilottery specifically, as it ensures that the sale of both ilottery games and national and regional multi-state games can continue to be strong contributors to lottery sales and the good causes that US lotteries support.”
The Wire Act subjects to criminal liability any person who ‘knowingly uses 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 contest, 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’.
In 2011, the DoJ’s Office of Legal Counsel (OLC) concluded that the Wire Act only applied to sports betting. Following that opinion, many lotteries began to offer non-sports gaming products over the internet, reasonably relying on the OLC’s conclusions that their activities were lawful.
In January 2019, the OLC reversed that prior decision and released a new opinion stating the Wire Act extended beyond the sports-betting context to criminalise interstate transmissions of all bets or wagers, overturning the conclusions of the 2011 opinion and threatening to shut down the burgeoning ilottery industry.
Working alongside the New Hampshire Lottery Commission, NeoPollard Interactive and Pollard Banknote, the New Hampshire Lottery’s ilottery providers, immediately sought a declaratory judgment in federal court that the OLC’s new Wire Act interpretation was based on an incorrect reading of the statute.
In June 2019, the US District Court for the District of New Hampshire confirmed that the federal Wire Act applies only to sports betting activities. The OLC appealed that decision.
In this latest judgement, the First Circuit affirmed the District Court’s June 2019 decision, restoring the 2011 interpretation that limited the Wire Act to sports betting in the process.
By upholding the 2011 interpretation that the Wire Act applies only to bets or wagers on a sporting event or contest, this ruling safeguards the New Hampshire Lottery, NeoPollard Interactive and Pollard Banknote, specifically, and all other ilottery operators, generally, from the threat of unlawful prosecution.
Any concerns about the pooling of bets or the transmission of wagers in connection with national and regional multi-state games such as Powerball and Mega Millions, whether through traditional retail or online channels, have now been eliminated.
Silver continued: “In terms of ilottery, we know first-hand the positive effect that these operations have had, not only on state resources but on player experience as well. The current worldwide pandemic has amplified the importance of this new channel.
“We look forward to continuing to provide state-of-the-art ilottery products and strategies to lotteries with an increasing array of products within the digital landscape.”
