IGT Wins Against DOJ, Wire Act Only Applies To Online Sportsbetting

International Gaming Technology or IGT, the largest provider of iGaming and lottery services in the US, won its fight against the DOJ concerning the Wire Act. The court victory has many implications for the future of sports betting, casino gaming, and online poker in the United States.

The long-winded case goes back to the Trump administration when NeoPollard Interactive, the online lottery platform for New Hampshire, sued the United States and the Department of Justice for clarification regarding the Wire Act. 

It was the New Hampshire Lottery Corporation and NeoPollard that sued the DOJ for clarity since the US Attorney General’s office had issued multiple memos regarding the Wire Act.

At the time, the Acting Assitant Attorney General of the US, Steven Engel, reversed an opinion from the previous administration in 2011. The memo from 2011 was from the DOJ telling Illinois and Pennsylvania that they didn’t need to worry about their inquiries regarding the Wire Act. During this time, Pennsylvania and Illinois were selling lottery tickets online and were allegedly using payment processing services out of the state. The two states simply wanted to ensure they were operating within the law. The Obama administration essentially said you won’t be prosecuted for using a payment processing company across state lines. The Trump administration then issued numerous memos on the subject that only made it more unclear.

And that’s when New Hampshire Lottery Corporation (NHLC) and NeoPollard sued the Department of Justice for clarification. In June 2019, the US District Court for the District of New Hampshire ruled that the Wire Act pertained only to sports gambling. Judge Paul Barbadoro presided over the case and granted the plaintiffs’ motion for summary judgment.

Judge Barbadoro, in the 60-page ruling, commented, “I grant the plaintiffs’ motions for summary judgement and deny the Government’s cross-motion for summary judgement” 

“I hereby declare that § 1084(a) of the Wire Act, 18 U.S.C. § 1084(a), applies only to transmissions related to bets or wagers on a sporting event or contest. The 2018 OLC opinion is set aside,” said Barbadoro.

The decision was appealed, however, by then-US Attorney General William Barr. The US Court of Appeals for the First Circuit then issued a decision in January 2021, affirming Judge Barbadoro’s decision without providing a clear decision for the rest of the US. In New Hampshire’s case, online lottery and poker operations were okay to continue, with interstate sports betting being the only activity limited by the court’s decision. 

After this decision, the Biden Administration and US Attorney General, Merrick Garland declined to appeal the case again, leaving the interruption of the Wire Act up for discussion for the rest of the US.

IGT gets involved

International Game Technology or IGT then sued Attorney General Garland and the US Department of Justice for failing to provide clarification for all US online gaming businesses.

The lawsuit detailed, “The 2018 OLC opinion remains DOJ’s binding policy today. As a result, IGT’s entire non-lottery gaming business is subject to prosecution, and DOJ has offered only the promise of a 90-day heads up before it can subject IGT’s lottery business to the Wire Act as well.” 

The IGT was simply seeking the same clarification as New Hampshire was back in 2019. 

Decision by DOJ

Initially, the Department of Justice tried to dismiss the case for lack of jurisdiction. The IGT responded in opposition to that motion with a memo in support of its own cross-motion for a summary judgement. 

Judge William Smith with the US District Court for the District of Rhode Island dismissed the DOJ’s motion to dismiss and granted IGT’s cross-motion for summary judgment. 

Judge Smith agreed with IGT, stating, “The DOJ’s shift in positions has created substantial uncertainty for broad swaths of IGT’s business, which developed under the 2011 OLC opinion. . . That uncertainty ripples outward. Should the DOJ issue guidance ending its deferral period for state lotteries, IGT would have ninety days to substantially revamp or end state lotteries in thirty-seven states. . . Given these concerns, there is no question that a judgment ‘will serve a useful purpose in clarifying and settling the legal relations in issue’ and afford significant relief ‘from the uncertainty, insecurity, and controversy giving rise to the proceeding.”

“The Court declares that, as to the parties now before it, the Wire Act applies only to ‘bets or wagers on any sporting event or contest.'”

The decision likely means that online poker and casino gaming, specifically interstate online poker and casino gaming, will continue to move forward. Many operators are likely safe from prosecution concerning the Wire Act. Unless congress works together to amend the Wire Act, we likely won’t hear much talk of changing this decision until 2024. If the DOJ did appeal, the case would likely go to the US Court of Appeals 1st Circuit (the same court to determine NeoPollard and NHLC’s decision). 

Mac Daniel is a Pennsylvania native and freelance writer for PlayOnlineCasino and PlayOnlineSportsBetting. He has experience writing about a wide variety of topics, including healthcare, tourism, non-profit organizations, and most recently casino and sportsbetting news. To check out more of his work, visit: playonlinepennsylvania.com