In 2011 the Department of Justice released a formal legal opinion regarding the scope of the 1961 Federal Wire Act. In this document the DOJ announced that they belief the Wire Act applies strictly to sports betting and not other forms of gambling. We will take a quick look at their statement and break down how it affects American bettors.
What is the Federal Wire Act?
Before we take a look at the Department of Justice’s legal opinion let’s briefly summarize the Federal Wire Act. Passed in 1961, this federal law made it illegal to transmit betting information across state lines via telephone or telegram. It’s purpose is to prevent organized crime operations from profiting off match fixing and to allow states to enforce their own respective gambling laws. The Wire Act specifically targets people who accept bets on US soil from American citizens living in different states. There are no federal laws against placing bets or using an offshore betting site.
2011 DOJ Formal Legal Opinion
New York and Illinois wanted to use out-of-state payment processors in order to sell lottery tickets in-state. This practice violates the 1961 Federal Wire Act which prevents the transmission of betting information across state lines. On September 20th, 2011 the United States Department of Justice released a formal legal opinion narrowing the scope of the Wire Act. They believed that since the Act was an anti-racketeering law meant to prevent the mafia from profiting off match fixing it should only apply to sports betting.
“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.”
This means that it is no longer illegal to transmit betting information across state lines as long as it does not pertain to a sports match. Many states immediately took advantage of this and implemented it in the sale of online lotteries.
Reversal and New Hampshire Lawsuit
The United States Department of Justice reversed the 2011 formal legal opinion on November 2nd, 2018. They announced that narrowing the Wire Act’s scope to strictly sports betting only applied to one subsection of the law. This subsection dealt with the transmission of information that would assist in placing bets on sporting events. This reversal yet again made it illegal for states to transmit non-sports related gambling information across state lines:
“This Office concluded in 2011 that the prohibitions of the Wire Act in 18 U.S.C. § 1084(a) are limited to sports gambling. Having been asked to reconsider, we now conclude that the statutory prohibitions are not uniformly limited to gambling on sporting events or contests. Only the second prohibition of the first clause of section 1084(a), which criminalizes transmitting “information assisting in the placing of bets or wagers on any sporting event or contest,” is so limited. The other prohibitions apply to non-sportsrelated betting or wagering that satisfy the other elements of section 1084(a).”
This disrupts the gambling operations of many states. The New Hampshire Lottery Commission filed a lawsuit against the DOJ citing that a reversal of the 2011 formal legal opinion would cost them $100 million per year in education funding. On June 3rd, 2019 the Federal District Court of New Hampshire ruled in their favor. Federal Judge Paul Barbadoro stated that the 1961 Federal Wire Act only applies to sports gambling. The Department of Justice filed a Notice of Appeal against the judges ruling on August 16th, 2019.
Is it safe for Americans to bet on sports?
Yes. The 1961 Federal Wire Act and the Department of Justice’s 2011 and 2018 formal legal opinions specifically target individuals and organizations who accept bets on US soil from residents of different states. The Wire Act does not target Americans who place bets using offshore sportsbooks; as these betting sites are licensed and located in countries with legal online gambling. There has never been a federal law against using an offshore betting site. Americans are free to use them without any fear of getting in trouble.
Below is a list of some recommended American betting sites for July 2020: