Justice Department Sued for Targeting Online Lotto Sales

Cashiers Kathy Robinson, left, and Ethel Kroska, right, both of Merrimack, N.H., sell a lottery ticket at Reeds Ferry Market convenience store in Merrimack on Jan. 7, 2018. (AP Photo/Steven Senne, FIle)

CONCORD, N.H. (CN) – New Hampshire Governor Chris Sununu and his state’s lottery commission sued the Department of Justice on Friday over a recent regulatory change that would bar the sale of lottery tickets online.

“Today New Hampshire is taking action to protect public education in New Hampshire,” Sununu said in a statement. “The opinion issued by DOJ puts millions of dollars of funding at risk, and we have a responsibility to stand up for our students.”

In a separate lawsuit Friday, the companies that operate New Hampshire’s lottery program raised a similar challenge.

Represented by the law firm Gibson Dunn, companies Neopollard Interactive and Pollard Banknote argue that the November 2018 regulation from the DOJ’s Office of Legal Counsel is too broad.

“As a result of the OLC’s erroneous change in position, gaming activities long thought to be lawful are now under threat of imminent criminal and civil prosecution,” the complaint states. “This includes not only making lottery products available to consumers for purchase via personal computers and mobile devices, but also traditional lottery sales via brick-and-mortar retail sales agents.”

Both suits are filed in U.S. District Court for the District of New Hampshire.

Dating back to 1964, New Hampshire’s is the first state lottery program on America’s mainland, following Puerto Rico’s lottery, which began in 1934.

In September 2018, New Hampshire became one of just six states to allow the online sale of lottery tickets. Two months later, the Department of Justice issued its opinion that the 1961 Wire Act applied to lottery sales over the internet.

The DOJ had original determined that the Wire Act applied only to sports betting online, but a re-examination from the department in 2018 yielded a broader interpretation.

“We do not lightly depart from our precedents, and we have given the views expressed in our prior opinion careful and respectful consideration,” Assistant Attorney General Steven Engel wrote last year. “Based upon the plain language of the statute, however, we reach a different result. While the Wire Act is not a model of artful drafting, we conclude that the words of the statute are sufficiently clear and that all but one of its prohibitions sweep beyond sports gambling.”

New Hampshire Lottery Executive Director Charlie McIntyre noted that the state lottery generates revenue to support education, which are funds that could now be in jeopardy.

“The New Hampshire Lottery has a responsibility to support education in New Hampshire,” McIntyre said in a statement. “Just last year, the New Hampshire Lottery generated $87.5 million in net profits, all of which supports education in New Hampshire, and we expect to generate more than $90 million for education this year. This reversal by DOJ puts that support for education in question.”

A spokesperson from the Department of Justice did not respond to an email seeking comment.

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