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To protect itself from future prosecution under the 1961 federal Wire Act, global gambling technology company International Game Technology (IGT) has just sued the US Department of Justice, a preemptive move to clarify whether its business is subject to that legislation.
The filing occurred last week according to a Tweet from gaming law & sports betting lawyer Daniel Wallach:
We have a new Wire Act lawsuit!
IGT is suing the Dep’t of Justice over the 2018 OLC Opinion (which was struck down in the New Hampshire case).
IGT seeks a declaratory judgment that the OLC opinion does not apply to its non-sports betting operations such as lottery and 9Gaming. pic.twitter.com/clnPgR6EbA
— Daniel Wallach (@WALLACHLEGAL) November 24, 2021
This IGT lawsuit is meant to seek clarity on whether it can continue to offer its products and services – online lotteries and iGaming products – in the United States without risking federal prosecution, since “virtually all modern lottery and gaming relies on interstate wires.”
It all stems from a 2018 Office of Legal Council (OLC) opinion which, according to IGT, could be used in the future to force it to shut down its sports betting operations or “risk federal felony prosecution.”
The Wire Act, as written, bans most forms of interstate betting, making this point clear in its opening text.
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.
In the past decade, a litigious debate has ensued between the DOJ and various state lottery commissions as to whether the Wire Act prohibits the use of the internet and out-of-state transaction processors to sell lottery tickets within state borders.
Eventually, the First Circuit Court of Appeals exempted New Hampshire’s state-run lottery from the Wire Act, saying the act “applied to sports wagering only,” but that ruling applied only to the specific plaintiffs in that case, meaning other suppliers (like IGT) might not enjoy a similar exemption from that rule.
Thus this current lawsuit is meant to determine if that same OLC opinion also applies to IGT.
To clear up any remaining ambiguity regarding how the federal Wire Act can be applied to such businesses as IGT, the company has filed this lawsuit.
In its complaint, the company seeks to avoid future litigation, stating:
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 move will force the DOJ to make clear its current interpretation of the Wire Act, which should give IGT a clearer idea of where its business legally stands.
Check back for the latest news and updates on this ongoing story.
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