In January 2021, the First Circuit Court of Appeals struck down the Department of Justice’s (DOJ)
attempt to extend the scope of The Federal Wire Act’s prohibition on interstate sports betting to include
other forms of interstate gaming.
The DOJ’s latest attempts to re‐interpret the 2011 DOJ Opinion put all manners of interstate gaming in some legal risk,
from online casinos in New Jersey and Pennsylvania to multi‐state lottery games like Powerball and Mega Millions.
This recent ruling re‐enforced the 2011 DOJ Opinion that clarified federal authorities only have the right to prosecute
violations of The Federal Wire Act only as it pertains to sports betting, but no other forms of gaming.
The Federal Wire Act still effectively prohibits individuals or companies from using the Internet to transmit sports
wagers across state lines, even if the sports book operator and the bettor are in separate states that each individually
allow legal sports betting.
The decision is significant for gaming benefits to nonprofits for two reasons. First, the ruling provides the legal foundation
for nonprofit organizations to launch online multi‐state raffles —
similar to state lottery Powerball and Mega Millions offerings — as a legal interstate activity. The only stipulation that
nonprofits must adhere to when launching a multi‐state raffle is to prevent the sale of raffle tickets to citizens who are from
states that ‘explicitly’ prohibit raffles in general or ‘explicitly’ prohibit the sale of raffle tickets online.
The laws are now there to legally launch a multi‐state online charitable raffle. The formation of a multistate
raffle bolsters the potential size of jackpots and will draw in a greater number of individuals larger
than any single state raffle can provide, increasing fundraising opportunities for nonprofits and revenue
for U.S. charitable gaming.
