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New Hampshire Commission v. Barr

United States District Court, D. New Hampshire

March 8, 2019

New Hampshire Lottery Commission, et al.
v.
William Barr, in his official capacity as Attorney General of the United States of America, et al.

          ORDER

          Paul J. Barbadoro United States District Judge

         A trade association of businesses involved in the internet gambling industry has filed an emergency motion to intervene in an action challenging a recent Office of Legal Counsel (“OLC”) reinterpretation of the Wire Act, which criminalizes certain gambling activities that involve the use of interstate wires. The trade association seeks to join two consolidated cases, one filed by the New Hampshire Lottery Commission (“Lottery Commission”), and the other by two businesses that contract with the Lottery Commission. Because the association's interests will be adequately represented by the present parties, I deny the motion.

         I. Background

         The relevant portion of the Wire Act of 1961, 18 U.S.C. § 1084, provides:

Whoever being engaged in the business of betting or wagering 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, shall be fined under this title or imprisoned not more than two years, or both. 18 U.S.C. § 1084(a).

         In 2011, the Office of Legal Counsel announced that “interstate transmissions of wire communications that do not relate to ‘a sporting event or contest,' fall outside the reach of the Wire Act.” See Virginia A. Seitz, Whether Proposals by Illinois and New York to Use the Internet and Out-of-State Transaction Processors to Sell Lottery Tickets to In-State Adults Violate the Wire Act, Memorandum Opinion for the Assistant Attorney General, Criminal Division, U.S. Dept. Just. 1 (Sept. 20, 2011) (quoting 18 U.S.C. § 1084(a)).

         In 2018, however, the OLC revisited that interpretation and determined that “the prohibitions of 18 U.S.C. § 1084(a) are not uniformly limited to gambling on sporting events or contests.” See Steven A. Engel, Reconsidering Whether the Wire Act Applies to Non-Sports Gambling, Memorandum Opinion for the Acting Assistant Attorney General, Criminal Division, U.S. Dept. Just. 23 (Nov. 2, 2018).

         On January 15, 2019, the Deputy Attorney General instructed federal prosecutors to “refrain from applying Section 1084(a) in criminal or civil actions to persons engaged in conduct violating the Wire Act in reliance on the 2011 OLC opinion prior to the date of this memorandum, and for 90 days thereafter.” See Applicability of the Wire Act, 18 U.S.C. § 1084(a), to Non-Sports Gambling, U.S. Dept. Just. (Jan. 15, 2019), Doc. No. 2-6. On February 28, the Deputy Attorney General extended that window through June 14, 2019. See Additional Directive Regarding the Applicability of the Wire Act, 18 U.S.C. § 1084(a), to Non-Sports Gambling, U.S. Dept. Just. (Feb. 28, 2019), Doc. No. 23-1.

         The Lottery Commission filed a complaint and a concurrent motion for summary judgment on February 15, 2019. The Commission seeks a declaratory judgment and an order “permanently enjoining the defendants from enforcing the 2018 Opinion.” See Doc. No. 21-1 at 26. Later that day, NeoPollard Interactive LLC, which “provides the technological infrastructure for New Hampshire's iLottery system, ” and its 50% owner, Pollard Banknote LTD (collectively “NeoPollard”) also filed a complaint and a concurrent motion for summary judgment. See Doc. No. 5-1 at 8. NeoPollard seeks a judgment declaring that the Wire Act is limited to “bets or wagers . . . on a sporting event or contest.” See Doc. No. 5-1 at 31. I consolidated the NeoPollard action with the Lottery Commission action on February 22, 2019. See Doc. No. 9.

         On February 25, iDevelopment and Economic Association (iDEA) filed an emergency motion to intervene in this consolidated action. The association “represents the interests of nearly two dozen member-organizations from virtually every sector of the iGaming community, including operations, development, supply, technology, marketing and payment processing.” Doc. No. 12-1 at 7. The proposed intervenor complaint specifies the New Hampshire-based activities of two of iDEA's members: “Worldplay Gaming Solutions and Paysafe Group provide payment-related services in connection with New Hampshire's iLottery operation.” See Doc. No. 12-2 at ¶ 14. The trade association asks to intervene “for the sake of protecting its members' interests and advancing separate and distinct legal rights and interests of private parties operating outside the specific context of state lotteries.” Doc. No. 12-1 at 7. Neither the consolidated plaintiffs nor the defendants object to iDEA's intervention.

         II. Analysis

         Federal Rule of Civil Procedure 24(a) controls intervention as of right. That rule provides:

On timely motion, the court must permit anyone to intervene who: (1) is given an unconditional right to intervene by a federal statute; or (2) claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant's ability ...

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