What To Expect From The Wire Act Case And What It Could Mean For Sports Betting

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Wire Act

Since we received in June the District Court of New Hampshire’s decision holding that the Wire Act only applies to sports betting, we waited for an appeal that took a bit longer than expected to arrive.

On Aug. 29, the First Circuit of Appeals docketed an appeal filed by the Department of Justice and Attorney General William Barr.

The same day, a notice of appearance was filed by NH Lottery Commission attorney Anthony J. Galdieri. A day later, four lawyers including the venerable Ted Olson filed notices of appearance on behalf of co-plaintiff Neopollard Interactive.

What’s next at the First Circuit

Within 14 days after filing a Notice of Appeal, the appellant (in this case, Barr and the DOJ) must file the “Record.” This includes:

After the court receives the record, the First Circuit will set a briefing schedule for the parties and any friends of the court to file briefs.

Who will hear the Wire Act case?

There will be a panel of three First Circuit Judges who hear the case. The panel could be comprised of any of the following:

Of the 10 listed, only Howard, Torruella, Lynch, Thompson, Kayatta and Barron have not taken senior status. That is a form of semi-retirement judges can take after 15 years of service. This means the six active judges are amongst those most likely to be on the panel.

What will the Wire Act appeal be about?

Ostensibly, the case will focus on the scope of the Wire Act. Most notably, the First Circuit will be tasked with determining whether the New Hampshire District Court was correct in determining that the Wire Act applies only to sports betting transactions and not all gambling transactions that implicate the use of interstate communication facilities.

This is, however, not the only question the First Circuit might have to answer. Many potential traps could derail the case without the First Circuit ever saying a word about the scope of the Wire Act. The first obstacle is a question about the ripeness of the case.

What does it mean to be ripe?

The constitution only allows courts to hear cases that are ripe or ready to be heard. A claim is “ripe” when the facts of the case have matured into an existing substantial controversy warranting judicial intervention.

The key question in the Wire Act case is whether the DOJ has taken sufficiently affirmative steps that enforcement of the new memorandum’s view of the statute is sufficiently likely so that the government’s actions meet this threshold.

Judge Paul Barbadoro of the District Court found that they did create a ripe controversy, but there is no guarantee the First Circuit will view it the same way.

Not the first rodeo for the First Circuit

The First Circuit, in fact, is one of two federal circuit courts which has opined on the scope of the Wire Act.

In the United States v. Lyons, a First Circuit panel composed of Judges Lynch, Thompson and author of the opinion, Kayatta, wrote that other courts held the Wire Act to only apply to sports wagering. This Lyons case only produced dicta; while dicta is not binding precedent, it can be highly influential.

In particular, given the likelihood that some of the same judges appear on the New Hampshire Lottery panel, there is a strong possibility they might look to their previous decisions for influence.

Impact in favor of the NH Lottery

A ruling in favor of the NH Lottery would provide two federal circuits holding that the Wire Act applies only to sports betting.

The First Circuit would join the Fifth Circuit who held similarly in 2002, but it is at least possible that the federal government would appeal a loss either for a rehearing en banc at the First Circuit or directly to the Supreme Court. Given the small composition of the First Circuit, it would seem perhaps more likely that the Barr Justice Department would go directly to the Supreme Court.

These rulings would bind Louisiana, Maine, Massachusetts, Mississippi, New Hampshire, Puerto Rico, Rhode Island, and Texas.

The current Wire Act case has important implications beyond US sports betting as to the scope of Office of Legal Counsel memoranda, and how exactly each executive administration uses previous guidance. As such, the government has far more riding on this case than blocking interstate gambling transactions.

Impact in favor of the DOJ

A decision in favor of the Department of Justice would threaten all mobile gaming activity.

Banks and credit card companies may feel threatened by the newly expanded scope of the Wire Act, effectively bringing a halt to mobile betting of any kind.

A decision in favor of the government would almost certainly see the plaintiffs seeking an appeal to the Supreme Court, as there would now be a split amongst two federal circuits. So-called circuit splits are often viewed as one of the main reasons for the Supreme Court to take the case.

There is also always the potential for an intervening event, including a settlement. In the interim, however, we wait for the briefs to be filed and arguments to be made on paper before oral arguments in Boston, likely this winter.