NASPL Responds to the DOJ Reversal of Opinion

By: Ifrah Law

On February 4, 2019, the North American Association of State and Provincial Lotteries (“NASPL”) issued a statement responding to the Department of Justice’s January 14, 2019, opinion regarding the Wire Act of 1961.  In its statement, the NASPL hints that the DOJ failed to consider the effects its latest Wire Act opinion would have on state lotteries.

The NASPL is a non-profit trade association that represents the 52 state and provincial lottery jurisdictions throughout North America.  Every year, U.S. lotteries bring in over $23 billion to support worthy causes within their jurisdictions ranging from economic development to education.  That the DOJ’s new interpretation of the Wire Act threatens U.S. lottery systems means that states and territories face losing big money for these programs.

In its statement, NASPL first points out that the 2011 DOJ opinion regarding the Wire Act – which stated that the Wire Act only prohibited interstate sports wagering – set in motion efforts by the various states and territories to improve their lottery infrastructure, sales, and customer service.  Specifically, certain efforts were made to integrate more modern technology to create a better customer experience.  Such technology was far outside the purview of the drafters of the original Wire Act.

NASPL’s statement continues in pointing out that these infrastructure improvements have “brought in tens of billions of dollars in revenue to good causes throughout the country” and have “increased transaction transparency and efficiency.”  In other words, more people are playing the lottery due to the technologically-improved customer experience.

The DOJ’s reinterpretation of the Wire Act is posed to threaten the lotteries’ successes because it puts these technologically-enhanced lottery transactions in a legal “grey area.”  A further consequence of the DOJ’s reinterpretation is that the related contracts and the industry’s ability to provide much-needed funding for public interests are at risk.

The tone of the statement is conciliatory, however, with NASPL and the lottery industry extending an olive branch to DOJ.  The industry has offered “to work immediately with the DOJ to assist in the understanding and resolution of satisfactory solutions for the confluence of technology, policy and law now described in the DOJ’s opinion reversal issued January 14, 2019.”