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// Public Gaming International // March/April 2015
3. not apply to pay-for-play online fantasy sports tournaments
conducted in accordance with the Unlawful Internet Gambling
Enforcement Act; and
4. not change or limit “the ability of a State licensed lottery retailer
to make in-person, computer-generated retail lottery sales under
applicable Federal and State laws in effect on the date of the enact-
ment of [the RAWA].” Thus, “in-person” lottery sales by licensed
lottery retailers would remain lawful to the extent they were lawful
on the date the RAWA became law.
As a result of the RAWA, the Wire Act would very likely render
unlawful the following lottery activities, as none would be exempted
by any of the above exemptions:
1. the operation of a state lottery (including traditional online games!) by
any current non-lottery state that had not enacted lottery legislation
by the date the RAWA became law (assuming, as is traditionally the
case, that lottery retailer terminals would exchange wagering informa-
tion (even if not actual wagers) with a central system via the internet);
2. the implementation of video lottery games by existing lottery states if
state laws existing when the RAWA became law did not allow for vid-
eo lottery games (assuming wagers or information assisting in wager-
ing would be communicated with a central system via the internet);
3. sales of lottery draw games via PCs and/or mobile devices, as now
being conducted by a few state lotteries;
4. sales of lottery ticket subscriptions via PCs and/or mobile devices,
as now being conducted by several state lotteries;
5. sales of lottery products by the state lotteries themselves (as is
allowed in several states), unless such state lotteries were licensed as
lottery retailers;
6. sales of lottery products via telephone; and
7. sales of lottery and casino games (including poker) via PCs and/or
mobile devices, as currently is done by the Delaware Lottery.
In addition, as a result of the RAWA, the Wire Act could render
unlawful the following state lottery activities because in each case it is
not clear that such sales would meet the “in person” licensed retailer
sales requirement of the RAWA’s lottery exemption:
1. existing video lottery gaming where the video lottery terminals
exchange wagering information (even if not actual wagers) with a
central system via the internet;
2. existing (and future) video lottery wide-area progressive games
(“WAPs”)—even if the bets are received in the same state in which
they are placed—if the video lottery terminals exchange wagering
information (even if not actual wagers) among themselves or with a
central system via the internet;
3. sales of traditional lottery draw games via player-activated terminals
(“PATs”) and sales of physical instant tickets via instant ticket vend-
ing machines (“ITVMs”) where the PATs and ITVMs exchange
wagering information with a central system via the internet. (A
narrow reading of the RAWA’s “in-person” licensed retailer sales
exemption could be held to require direct player interaction with
lottery retailer personnel and no such interaction is necessary with
PATs and ITVMs); and
4. player-operated ticket checkers, as these too could be deemed to
be outside of—and thus not covered by—the “in-person” licensed
retailer sales exemption.
Finally, if amended by the RAWA, the Wire Act most likely would
render unlawful several non-lottery internet gaming activities, includ-
ing the intrastate internet casino games currently operated by certain
Atlantic City casinos in New Jersey, and the intrastate internet poker
currently conducted by commercial licensees in Nevada.
Unless one of the four above-described exemptions applied,
wagers or wagering information sent via the internet would be
prohibited—even if sent between points in the same state. This
is because the RAWA clarifies that a “transmission in interstate or
foreign commerce,” as used in the Wire Act, “includes any trans-
mission over the Internet carried interstate or in foreign commerce,
incidentally or otherwise.” (emphasis added) Thus, considering a
transmission of wagers or wagering information between points
in the same state, if the intermediate routing of such transmission
crossed state lines, it would violate the Wire Act (assuming none
of the four exemptions applied). In addition, the U.S. courts of
appeal in the first, third and fifth federal circuits have held that
transmissions via the internet are in interstate commerce, regard-
less of the actual routing.
11
Finally, the RAWA does not address the advertising or payment
prohibitions that exist in the Wire Act. Accordingly, if the RAWA
were enacted, lotteries also:
1. could be prohibited from paying prizes electronically, because it
would be unlawful to transmit via the internet a “communication
which entitles the recipient to receive money or credit as a result
of any bet or wager,” and a court could interpret this to preclude
electronic funds transfers and wire transfers of prizes; and
2. might be prohibited from posting on the internet lottery game
rules, “how to play” advice or advertising. This would be the case
if such posted information was deemed to “assist” in the placing
of any bet or wager” and its ban was not deemed to change or
limit the ability of licensed lottery retailers to make in-person
sales. (However, such a ban on commercial speech might be un-
11 The U.S. Court of Appeals for the Third Circuit stated: “[B]ecause of the very
interstate nature of the Internet, once a user submits a connection request
to a website server … the data has traveled in interstate commerce.” U.S. v.
MacEwan, 445 F.3d 237, 244 (3rd Cir. 2006); and the U.S. Court of Appeals for
the First Circuit stated: “Transmission…by means of the Internet is tantamount
to moving [data] across state lines.” U.S. v. Carroll, 105 F.3d 740, 742 (1st Cir.
1997), followed by U.S. v. Runyan, 290 F.3d 223 (5th Cir. 2002) and by U.S. v.
Yong Wang, 2013 U.S. Dist. LEXIS 16153 (S.D.N.Y. 2013).
