The Federal Wire Act is a US law that makes it illegal to accept bets across state lines. It was put into effect by Congress on September 13, 1961. It’s goal is to prevent organized crime syndicates from profiting off fixing sports events. It is not illegal for Americans to bet offshore as the Wire Act specifically focuses on interstate gambling. In this article we will provide you with a brief overview of everything you need to know about the main American betting laws.
Federal Wire Act
The Federal Wire Act was put into law on September 13, 1961. It is part of a series of anti racketeering laws that aim to limit the expansion of organized crime. The Federal Wire Act prohibits the transmission of betting information across state lines via telephone and telegram. This means that it is against the law to accept a bet from someone in a different state, but not illegal to use an offshore betting site. The Act makes it harder for mafia operations to profit off fixing sports events. It also gives power to the states allowing them to enforce their own respective gambling laws.
Is it against the law to place a bet?
Congress made it clear that the Federal Wire Act specifically targeted the organizations who were accepting interstate bets and not the bettors who were placing them. During a debate in the House of Representatives, Congressman Emanuel Celler, Chairman of the House Judiciary Committee at the time, confirmed this:
“This bill only gets after the bookmaker, the gambler who makes it his business to take bets or to lay off bets… It does not go after the causal gambler who bets $2 on a race. That type of transaction is not within the purvue of the statute.”
The Federal District Court further added that Americans who wager larger amounts and operate with a degree of sophistication are also not targets of the Federal Wire Act. The only thing that is illegal is to accept a bet from someone who is located in a different state. In short you cannot get in any trouble by placing a bet online.
Does the Federal Wire Act affect offshore betting sites?
Nope! The Federal Wire Act only prevents you from running your own illegal betting site on US soil and accepting wagers from customers in different states. Offshore sportsbooks are betting sites that are licensed and regulated by countries that have legal online gambling. There is no federal laws preventing Americans from using offshore sportsbooks. Many of these betting sites have been serving the US market for years and have flawless reputations.
Our recommended American betting sites for July 2020:
2011 Department of Justice Legal Opinion
On September 20th, 2011 the United States Department of Justice released a formal legal opinion regarding the 1961 Federal Wire Act. New York and Illinois wanted to use out-of-state payment processors for the sale of in-state lotteries. This would have been a violation of the Wire Act which prevented the transmission of betting information across state lines. The Department of Justice stated that the 1961 law 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.”
2018 Department of Justice Reversal
On November 2, 2018 the Department of Justice announced a reversal to their 2011 formal legal opinion that narrowed the scope of the Federal Wire Act to sports betting. They claimed that the restriction only applied to one part of the 1961 law regarding the transmission of information which assists in placing bets on sporting events. This change again prevented the use of out-of-state payment processors for online lottery sales. The Department of Justice gave businesses 90 days to comply.
2019 New Hampshire Lawsuit
The New Hampshire Lottery Commission immediately filed a lawsuit with the US District Court. They claimed that the Department of Justice’s 2018 reversal would cost them up to $100 million in education funds. On June 3rd, 2019 District Court Judge Paul Barbadoro ruled in favor of New Hampshire, claiming that the 1961 Federal Wire Act should only be applied to sports betting. The Department of Justice filed a Notice of Appeal on April 16th, 2019.
The 1961 Federal Wire Act makes it illegal to accept bets from Americans living in other states while operating on US soil. This was done to curtail organized crime and was never intended to go after everyday people who just waned to place sports bets. Further, the Federal Wire Act does not apply to offshore betting sites because they are not located in the United States. Americans can safely bet online using offshore sportsbooks that are open to the US market without any problems. For a more detailed description please refer to the Federal Wire Act wiki page.