Wire Act reinterpretation could cost states US$220m

The DoJ’s Wire Act reinterpretation could have states losing US$220 million in annual lottery profits, legal experts say.

US.- The US Department of Justice (DoJ) recently issued a Wire Act reinterpretation that could hurt online gaming. The opinion may end up costing a bunch of states at least US$220 million in annual lottery profits.

According to legal experts, Powerball and Mega Millions are at risk if the opinion is read to the letter. Should it happen, states would end up losing money used to fund scholarships, senior citizen services and other programs.

States which sell lottery tickets online (seven) fear the business would be illegal under the opinion.

David Gale, North American Association of State and Provincial Lotteries’ executive director asked for clarity on the issue. “It’s like trying to run a business and not knowing the rules about it. That clarity is the important thing to us now as far as the DOJ issue goes.”

The reinterpretation

The US Department of Justice (DoJ) recently issued a reinterpretation of the Wire Act, which would impact on sports betting and other forms of online gambling. After generating major criticism from the industry, Deputy Attorney General Rod Rosenstein suggested that the Act doesn’t address if the law applies to state lotteries.

Rosenstein said in a memo that the reinterpretation doesn’t actually discuss state lotteries and therefore asks for a review. His question raises further criticism as it isn’t clear lotteries are exempt from the Act.

“The OLC opinion did not address whether the Wire Act applies to state lotteries and their vendors. The Department is now reviewing that question,” says Rosenstein. “If the Department determines the Wire Act does apply to state lotteries or their vendors, then Department of Justice attorneys should extend the forbearance period for 90 days after the Department publicly announces this position.”