Federal Wire Act

The Interstate Wire Act of 1961, often called the Federal Wire Act, is a United States federal law prohibiting the operation of certain types of betting businesses in the United States. It begins with the text:

Whoever being engaged in the business of betting or wagering knowingly 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, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.[1]

Federal Wire Act
Other short titlesInterstate Anti-Crime Act
Long titleAn Act to amend chapter 50 of title 18, United States Code, with respect to the transmission of bets, wagers, and related information.
NicknamesInterstate Wire Act of 1961
Enacted bythe 87th United States Congress
EffectiveSeptember 13, 1961
Citations
Public law87-216
Statutes at Large75 Stat. 491
Codification
Titles amended18 U.S.C.: Crimes and Criminal Procedure
U.S.C. sections amended18 U.S.C. ch. 50 § 1081 et seq.
Legislative history
  • Introduced in the Senate as S. 1656
  • Signed into law by President John F. Kennedy on September 13, 1961

In September 2011, the US Department of Justice released to the public a formal legal opinion on the scope of the Act concluding, "interstate transmissions of wire communications that do not relate to a 'sporting event or contest' fall outside the reach of the Wire Act."[2]

A new Department of Justice opinion dated November 2, 2018 reversed the 2011 opinion, declaring that the Wire Act’s prohibitions are “not uniformly limited to gambling on sporting events or contests.”[3]

The U.S. Fifth Circuit Court of Appeals has ruled that the Wire Act prohibition on the transmission of wagers applies only to sports betting and not other types of online gambling.[4] The Supreme Court has not ruled on the meaning of the Federal Wire Act as it pertains to online gambling. In an opinion issued November 2018 and published January 2019, the Department of Justice stated that the Federal Wire Act applies to all gambling and not just sports betting.[5]

On January 15, 2019, Deputy Attorney General Rod Rosenstein announced that the Department of Justice would delay enforcement of the 2018 OLC opinion for 90 days to “give businesses that relied on the 2011 OLC opinion time to bring their operations into compliance with federal law."[6]

On February 15, 2019, the New Hampshire Lottery Commission filed a complaint in the US District Court for New Hampshire, naming the Department of Justice and Attorney General William Barr as defendants.[7] The suit asks the Court to vacate and set aside the OLC’s new opinion, which the Commission claims will reduce its annual profits by millions of dollars.[8] New Hampshire Gov. Chris Sununu said the state wasn’t interested in negotiating an out-of-court settlement, “we’re looking to win.”[9]

On June 3, 2019, U.S. District Court Judge Paul Barbadoro issued a summary judgment that the Wire Act “is limited to sports gambling” and set aside the 2018 OLC opinion.[10] A Department of Justice spokesperson said the government was reviewing the decision.[11] On August 16, 2019, the Department of Justice filed notice of its intention to appeal Barbadoro’s ruling to the U.S. First Circuit Court of Appeals.[12]

Background
It is quite evident that modern, organized, commercial gambling operations are so completely intertwined with the Nation's communications systems that denial of their use to the gambling fraternity would be a mortal blow to their operations

—Robert F. Kennedy discussing how the Wire Act would affect organized crime[13]

After being selected to become US Attorney General, Robert F. Kennedy suggested to the 87th United States Congress to pass legislation which would make interstate gambling illegal. Kennedy's goal of the legislation was to help the United States Justice Department stop organized crime from trafficking.[14] One of the eight bills given to Congress was Senate Bill 1656—The Wire Act.

Signing

The Interstate Anti-Crime Acts were signed by the 35th President of the United States John F. Kennedy on September 13, 1961.[15][16][17][18]

See also

Notes
  1. 18 U.S.C. § 1084
  2. "Whether Proposals by Illinois and New York State to Use the Internet and Out-of-State Transaction Processors to Sell Lottery Tickets to In-State Adults Violate the Wire Act" (PDF). United States Department of Justice. September 20, 2011. p. 1. Retrieved June 29, 2012.
  3. Sykes, Michael. "New DOJ opinion expands Wire Act outside of sports betting". Axios. Retrieved 15 January 2019.
  4. "In RE:  Mastercard International Inc. Internet Gambling Litigation". FindLaw. November 20, 2002. Retrieved June 29, 2012.
  5. Bach, Natasha. "Justice Department Says All Online Gambling Is Illegal". Fortune. Retrieved 2019-01-15.
  6. Rosenstein, Rod. "Applicability of the Wire Act". Justice.gov. Retrieved 21 January 2019.
  7. Huffman, Zack (15 February 2019). "Justice Department Sued for Targeting Online Lotto Sales". Courthouse News Service. Retrieved 26 February 2019.
  8. Landrigan, Kevin. "NH will sue to keep $5M/year in lottery profits at stake in Trump online gambling crackdown". UnionLeader.com. Retrieved 26 February 2019.
  9. Batt, Tony. "New Hampshire Governor Not Interested In Settling Lottery Lawsuit | GamblingCompliance". gamblingcompliance.com. Retrieved 26 February 2019.
  10. Cousineau, Michael. "NH Lottery Commission wins its case over online lottery sales". UnionLeader.com. Retrieved 7 June 2019.
  11. Salant, Jonathan D. (3 June 2019). "Court decision supports N.J. online gambling over Trump administration opposition". nj.com. Retrieved 7 June 2019.
  12. Brooks, David. "Feds continue fight against online betting, threatening lottery sales". Concord Monitor. Retrieved 20 August 2019.
  13. Schwartz (2010), p. 535
  14. Schwartz (2010), p. 553
  15. Schwartz (2010), p. 537
  16. "Bill signings – S. 1653, S. 1656, S. 1657, Interstate Anti-Crime Acts, 11:00AM". John F. Kennedy Presidential Library and Museum.
  17. "Interstate and Foreign Travel or Transportation in Aid of Racketeering Enterprises Act - P.L. 87-228" (PDF). 75 Stat. 498-2 ~ Senate Bill 1653. U.S. Government Printing Office.
  18. "Interstate Transportation of Wagering Paraphernalia Act - P.L. 87-218" (PDF). 75 Stat. 492-2 ~ Senate Bill 1657. U.S. Government Printing Office.

References
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