New Hampshire challenges US Department of Justice over online gambling

New Hampshire and the company that supports the state’s iLottery system have sued the U.S. Department of Justice over a legal opinion that could put an end to online gambling and state-run lotteries.

The Justice department issued a legal opinion in November that re-interpreted the federal Wire Act of 1961 to ban interstate wagering. The department had been maintaining that online gambling within states that does not involve sporting events would not violate federal law, but in the November opinion, the officials said the law applies to any form of gambling that crosses state lines.

The New Hampshire Lottery Commission filed a lawsuit in federal court citing that the opinion subjects its employees to prosecution, creates uncertainty about whether it should cease operations and could cost the state more than $90 million a year.

Only a small portion of that total comes from the “iLottery” platform the state launched in September and is expected to bring in $4 to $6 million in the fiscal year that starts in July. But the broadest interpretation of the opinion would prohibit all lottery-related activities that use the internet, Attorney General Gordon MacDonald argued in the complaint. That includes transmission of data to backup servers set up in other states.

“Today New Hampshire is taking action to protect public education,” Gov. Chris Sununu said in a statement. “The opinion by DOJ puts millions of dollars of school funding at risk, and we have a responsibility to stand up for our students.”

“There is no indication in the plain language of (the Wire Act), its structure, its purpose, or its legislative history of an unmistakable Congressional intent to outlaw state-conducted lottery activity,” MacDonald wrote. “If Congress wishes to criminalise the interstate transmissions required to operate state-conducted lotteries, it must do so in clear, unmistakable language. Congress has not done that in the Wire Act. ”

NeoPollard Interactive, which offers support for New Hampshire’s iLottery hardware and software, has also filed a suit.

The company’s attorney, Matthew McGill, called the justice department’s opinion a “lawless act.”

“This opinion would subject to felony prosecution conduct that two court of appeals, including the First Circuit, have said is lawful,” he said in a statement. “This is an outrageous and dangerous usurpation of authority.”

The Department of Justice declined to comment.