D.C. Weighs In on Novel “Statute of Anne” Suit

Back in February, a limited liability company filed a lawsuit against the five companies licensed to operate online sports betting in the District of Columbia (“District” or “D.C.”). The case invokes an old section of the D.C. Code that has its origins in an 18th century British law known as the “Statute of Anne.” The plaintiff contends that this law allows it to recover damages on behalf of all persons who have lost more than $25 in wagers to any of the defendants since 2019. The defendants have now filed two motions to dismiss, and D.C. has intervened with a brief of its own urging the court to reject the suit. 

This client alert discusses the plaintiff’s allegations in more detail and summarizes the arguments made in response thereto.

The Statue of Anne

The original Statute of Anne was an act of the Parliament of Great Britain passed in 1710 and was named for the then-British monarch Queen Anne. Primarily known for being the world’s first copyright law, the Statute of Anne also contained a provision concerning gambling debts. Specifically, the law provided that such debts exceeding 10 pounds were void and that an individual who lost more than that amount could sue the winner to recover the amount lost. Moreover, the law further provided that if the loser did not pursue recovery from the winner within three months of payment, any third party could step into the shoes of the loser and sue the winner to recover.

Eventually, as with most things British at the time, the Statute of Anne made its way to the American colonies and eventually into Maryland law. Then, in 1801, when a federal district was formed out of territory ceded by Maryland and Virginia, the new District of Columbia adopted Maryland law, including the Maryland version of the Statute of Anne, which was later codified as D.C. Code Section 16-1702 and remains in the D.C. Code to this day. Section 16-1702 reads as follows:

A person who, at any time or sitting, by playing at cards, dice or other game, or by betting on the sides or hands of persons who play, loses to a person so playing or betting, a sum of money, or other valuable thing, amounting to $25 or more, and pays or delivers the money or thing, or any part thereof, may within three months after the payment or delivery, sue for and recover the money, goods, or other valuable thing, so lost and paid or delivered, or any part thereof, or the full value thereof, by a civil action, from the winner therefor, with costs. If the person who loses the money or other thing, does not, within three months actually and bona fide, and without collusion, sue, and with effect prosecute, therefor, any person may sue for, and recover treble the value of the money, goods, chattels, and other things, with costs of suit, by a civil action against the winner, one-half to the use of the plaintiff, the remainder to the use of the District of Columbia.

D.C. is not the only American jurisdiction to have such a law on the books. Known as “loss recovery acts” or “LRAs,” these old laws are, or at least were, intended to prevent losing bettors from sustaining ruinous gambling losses. However, these laws were aimed at combatting the effects of illegal gambling and, in fact, many of these laws expressly apply only to illegal gambling losses. Although D.C.’s version does not include the word “illegal,” that qualifier would seem to be implied given the historical intent behind such laws and the absurdity of applying the law to legal gambling losses given D.C.’s adoption of a legal sports betting regime in 2019.

The Recent History of Sports Betting in D.C.

In the wake of the Supreme Court’s 2018 decision in Murphy v. NCAA, which declared the federal Professional and Amateur Sports Protection Act (“PASPA”) unconstitutional and effectively allowed the states to legalize sports wagering, several jurisdictions quickly moved to do just that within their borders. In January 2019, D.C. became one of them when Mayor Muriel Bowser signed the Sports Wagering Lottery Amendment Act (“SWLAA”), and without congressional objection, it effectively made sports wagering and related activities legal in the District, subject to duly adopted regulations. The regulations implementing the SWLAA evolved over time and eventually allowed several mobile platforms to operate in D.C.

The Pending Lawsuit

On Feb. 28, 2025, an entity named DC Gambling Recovery LLC formed in Delaware just days earlier, filed a complaint in Superior Court in Washington, D.C., against the five major sports betting operators that are licensed and doing business in the District today. The suit both challenges the legal legitimacy of D.C.’s sports betting regime and seeks damages pursuant to D.C.’s Statute of Anne. In April, the defendants removed the case to federal district court in D.C. on both the federal question and diversity grounds.

As noted above, the suit is premised on various arguments that can charitably be described as novel given the broader legal and legislative context surrounding this matter. The first argument is that because the SWLAA did not repeal Section 16-1702, its $25 cap on wagers is still in effect, thus rendering any losses in excess of that amount subject to the recovery scheme (including, potentially, treble damages) provided for in that section. The suit’s second argument is that the Murphy decision applied to the states only, and not to D.C. because the court’s decision was based on the Tenth Amendment’s limitation on state authority. Therefore, the plaintiff contends that the SWLAA is invalid because PASPA is still binding on D.C. because it is not a state, thus effectively rendering the SWLAA ultra vires, or beyond D.C.’s authority. The defendants clearly disagree and have filed motions to dismiss the suit.

The Defendants’ Motions to Dismiss

In two separate motions to dismiss for failure to state a claim, all five defendants seek to dismiss the complaint pursuant to FRCP 12(b)(6). Between the two motions, the arguments made can be summarized as follows.

First, the defendants argue that the plaintiff’s claims fail as a matter of law because Section 16-1702 simply does not apply to sports wagering. As noted above, Section 16-1702 references wagers on “cards, dice or other game” and makes no mention of sports wagering. Moreover, it is argued that the reference to “other game” may include other traditional table games of chance but cannot possibly include sports wagering in the form offered by the defendants, therefore rendering the damages scheme in Section 16-1702 entirely inapplicable to the defendants’ operations.

Second, the defendants argue that Section 16-1702 applies only to individuals and not corporations. Looking back to the commonly understood definition of a person, both during the time the Statute of Anne was originally enacted and when it was originally adopted by D.C., the motions argue that “person” was understood to mean a natural person as opposed to a business entity, and therefore, Section 16-1702 must be interpreted accordingly today. As a result, it is argued that as a limited liability company, the plaintiff in this case is simply not able to make a claim, and as business entities, the defendant companies cannot be liable under this law.

Third, they argue that, even assuming the Statue of Anne covered sports wagering and corporate entities in the first place, the SWLAA clearly authorized the defendants’ licensed sports wagering operations and therefore overrides any application of Section 16-1702 to such activity. In other words, the defendants contend that with D.C.’s authorization of sports wagering, the Statue of Anne was effectively repealed because of the well-established legal principle that holds that a later act overrides and repeals an earlier one to the extent the two are incompatible and cannot coexist.

Fourth, the companies argue that PASPA has no force or effect in D.C. because Congress would not have banned sports gambling in only the District and the U.S. territories while allowing only the “states” to decide for themselves. Instead, it is argued that Congress intended PASPA to ban sports gambling nationwide, except for a handful of grandfathered-in states, and, therefore, the elimination of PASPA had a similar nationwide impact. Indeed, PASPA defined “States” as “the several States, the District of Columbia … or any territory or possession of the United States.”

Finally, the defendants argue that even if Section 16-1702 was not rendered effectively void by the enactment of the SWLAA, it cannot be applied to sports betting operators because they are not “winners” as that term is defined by the D.C. Code. Section 16-1702 permits civil actions against “a winner” at “cards, dice, or any other game, or by betting on the sides or hands of persons who play,” win more than $25. It is argued that the companies sued here are simply not “winners” of the type contemplated by the D.C. Code.

D.C. Weighs In

With a lot at stake, D.C. successfully sought to intervene in the case and recently filed a brief of its own urging the court to reject the plaintiff’s novel theory. In addition to adopting the defendants’ arguments, D.C. emphasized the following points.

First, as to PASPA, D.C. argues that following Murphy, PASPA is no longer in force anywhere, including the District, and thus does not bar the SWLAA. Moreover, D.C. argues that the SWLAA and Section 16-1702 are obviously inconsistent and to give Section 16-1702 any effect at this point would be fundamentally incompatible with D.C.’s broader legalization and regulation of sports wagering. 

D.C.’s brief also notified the court that there is now legislation pending before the D.C. Council, as part of the mayor’s budget for fiscal year 2026, that would explicitly clarify what the SWLAA did by specifying that Section 16-1702 does not apply to sports wagering, retroactive to the passage of SWLAA, thus arguably mooting the case entirely if and when the D.C. Council enacts the pending legislation. 

Next Steps in the Case

The plaintiff will, as usual, have an opportunity to file an opposition to each of the defendants’ motions to dismiss. Ultimately, the court will have the final say on whether the plaintiff’s theory is merely novel or if it is, as the defendants contend, “baseless as a matter of statutory construction, absurd as a matter of common sense, and concerning as a matter of constitutional first principles.”  Brownstein’s gaming team will continue to follow this case closely. For questions about the regulation of sports betting or any other gaming issue, contact the authors or any member of our gaming practice group.

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This document is intended to provide you with general information regarding the Statute of Anne and its application to sports betting and gaming. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.