On Jan. 14, the U.S. Department of Justice issued a memo that reinterpreted a 1961 law designed to combat organized crime involvement in gambling. The Wire Act of 1961 specifically applies to anyone “in the business of betting or wagering” who “uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest.” Evolving telecommunications technology raised questions about the law’s applications, especially once online lottery sales became feasible.
In 2009, the New York State Lottery Division and then-Illinois Gov. Pat Quinn wrote to the DOJ separately to ask for clarification concerning interstate transmission of lottery data. New York argued that all lottery tickets would be bought and sold within the state, but that transaction data may be rerouted to data centers in other states to deal with heavy network traffic and weather issues. They also pointed out that New York had used this system since 2005, and over 40 state lotteries used similar systems. Quinn explained that their state lottery was a pilot program implemented to avoid “an unprecedented fiscal crisis,” and the program was “a key part of the State’s strategy to address this crisis and raise additional revenue to fund critical state programs…”