Federal Wire Act

The Federal Wire Act is a United States federal law forbids interstate gambling operations. Put into effect on September 13, 1961, the Act prohibits accepting bets through telephone or telegraph across state lines. The law aimed to preserve the integrity of sports matches from the influence of organized crime.

History

1961: Federal Wire Act

The Federal Wire Act (also known as the Interstate Wire Act) was put into law by Congress on September 13, 1961. It's purpose was to prevent betting across state lines to allow individual states to enforce their own respective gambling laws. The law targeted the individuals who were taking bets rather than those placing them. The Federal Wire act was part of a series of anti-racketeering laws in the 1960s and aimed to prevent organized crime from manipulating the outcome of games through match fixing.

Subsection (a) of Title 18 of the United States Code section 1084 Transmission of wagering information; penalties reads:

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.

2011: Department of Justice Formal Legal Opinion

On September 20, 2011 the United States Department of Justice released a formal legal opinion regarding the 1961 Federal Wire Act. This was initiated when the states of New York and Illinois inquired whether the use of out-of-state payment processors to sell lottery tickets would violate the Act (which prohibited gambling across state lines through telephone and telegram). The Department of Justice's opinion dictated that as long as the wire communications did not relate to a sports match it would not violate the 1961 law:

Interstate transmissions of wire communications that do not relate to a sporting event or contest fall outside the reach of the Wire Act. Because the proposed New York and Illinois lottery proposals do not involve wagering on sporting events or contests, the Wire Act does not prohibit them.

Applications

The purpose of the Federal Wire Act was to prevent illegal gambling wagers from being placed across state lines over the telephone. This was primarily done in an effort to prevent organized crime manipulating games through match fixing. The Federal Wire Act aimed to punish those who were taking bets instead of those who were placing them.