The lawsuit that IGT and its US-based subsidiary filed against the Department of Justice (DOJ) over the department’s stance on the federal Wire Act has entered a new phase now that both sides have filed their remaining briefings with the court.
What happens next in US District Court for the District of Rhode Island is unclear, but two possible courses of action for District Court Judge William Smith were outlined in the most recent briefings — Smith could dismiss the case, as the DOJ wants, or he could issue a summary judgment in IGT’s favor, as the company wants.
Neither scenario is expected to provide clarity to the iGaming industry.
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DOJ to IGT: You Face No Reasonable Threat of Prosecution
IGT “does not face any threat of successful prosecution, much less a credible one, anywhere in the First Circuit, including in this District.
Both sides in the case agreed on March 18 to consolidate their remaining briefings.
For the DOJ, that meant filing a reply memorandum in support of its own motion to dismiss the case for lack of jurisdiction, while also outlining its opposition to IGT’s cross-motion for summary judgment. The DOJ filed a 15-page document to that effect on March 30.
“IGT argues that it 'faces the exact same threat and hardship to its lottery business as the parties in New Hampshire Lottery Commission (NHLC) v. Barr, and, therefore, has the standing to seek a declaratory judgment for the exact same reasons,’” the government argued.
“But that is not right. When the parties in [NHLC] filed their declaratory judgment action, it was an open question whether they could be prosecuted successfully for non-sports gambling of any kind — whether connected with a lottery or not — in the District and Circuit on whom they called to decide that question.”
The DOJ added that IGT “does not face any threat of successful prosecution, much less a credible one, anywhere in the First Circuit, including in this District. With respect to the other jurisdictions in which it operates, IGT still fails to establish a credible threat of prosecution, pointing to no Wire Act prosecutions of similarly situated parties…”
The DOJ filed a motion to dismiss the case on February 23.
IGT to DOJ: We Shouldn’t Have to Operate This Way
A declaratory judgment in IGT’s favor is the only way to 'relieve the uncertainty [and] insecurity’ that the government’s position has created.
IGT faced an April 6 deadline to file a reply in support of its cross-motion for summary judgment, which the company made on March 16.
“In the end, the government offers no good reason why this court should reach the opposite result of the one the First Circuit reached in NHLC,” attorneys Mark Hichar and David Fixler wrote for IGT.
Citing the NHLC case, the lawyers argue that “IGT and its state lottery partners 'should not have to operate under a dangling sword of indictment while DOJ purports to deliberate without end the purely legal question it had apparently already answered and concerning which it offers no reason to expect an answer favorable to the plaintiffs.’
“A declaratory judgment in IGT’s favor is the only way to 'relieve the uncertainty [and] insecurity’ that the government’s position has created. There is no reason to treat IGT differently from the plaintiffs in NHLC.”
What’s At Stake for US Online Gambling
IGT, the largest provider of iGaming and lottery services in the US, filed its lawsuit against the DOJ in November 2021.
At issue are conflicting opinions issued by the DOJ’s Office of Legal Counsel during the Obama and Trump administrations. While the Obama DOJ held in 2011 that the Wire Act applied only to sports betting, the Trump DOJ disagreed and reversed course in 2018.
In January 2021, the First Circuit ruled in the New Hampshire case that the Wire Act applies only to sports betting. The Biden DOJ declined to appeal that case before a June 2021 deadline to do so.
US gaming law attorneys believe that the DOJ wants the case dismissed because it doesn’t want to go on record disavowing the Trump DOJ’s position.
Meanwhile, IGT aims to broaden the First Circuit’s ruling to apply to all other Circuits, but a narrow ruling by Smith that applies only to IGT could have the opposite effect and lead to further uncertainty for the iGaming industry.
The case in Rhode Island District Court is IGT et al v. Garland et al.
