ST IN SO N LE ON AR D ST RE ET L LP \\ ST IN SO N. CO M \\ LAW OF FIC ES I N 15 U .S . LO CA TI ON S
Don't Bet On It
Interstate Sports Betting Markets Hampered By Federal Wire Act
September 21, 2018
The sports betting legal market dramatically shifted when the U.S. Supreme Court struck down the Professional and Amateur
Sports Protection Act (PASPA) as unconstitutional commandeering under the 10th amendment.1 PASPA prohibited state and
local legislatures from enacting laws that would favor sports betting. But the U.S. Supreme Court ruled that PASPA was
unconstitutional because it “dictates what a state legislature may and may not do.”2 As a result, PASPA is no longer the
primary impediment to legalized sports gambling.
Freed from the restraints of PASPA, state legislatures have been moving at a breakneck pace to enact their own framework to
legalize and regulate sports betting. For example, West Virginia, Pennsylvania, Mississippi, Delaware, New Jersey and
Nevada have successfully enacted regulations and legislation favoring lawful sports betting. Moreover, sports betting
businesses, such as bookmakers, casinos, sports data analysts, and others now may expand their businesses. Yet one
federal law serves as a potential impediment to the expansion of legalized interstate sports betting – the Federal Wire Act (18
U.S.C. § 1804).3
Signed into law by President Kennedy in the 1960s, the Federal Wire Act4 was designed as a tool to suppress organized
crime, specifically by focusing on the transmission of sports wagers or information connected to sports wagering.5 The statute
provides:
Whoever being engaged in the business of betting or wagering knowingly uses a wire communication
facility6 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.7
By its express terms, the Federal Wire Act creates criminal liability for those who use a wire to transmit sports information8 in
connection with a bet or wager, or alternatively, use a wire to transmit a bet or wager. However, the Federal Wire Act does not
apply to intrastate commerce.9 But what happens10 if the transmission of a sports wager or information in connection with a
sports wager is incidentally transmitted across state lines. For example, consider the scenario where the bettor places a bet
1See Murphy v. Nat’l Collegiate Athletic Ass’n, 138 S. Ct. 1461 (2018).
2Id. at 1478.
3 See generally 18 U.S.C. § 1801, et seq.
4 The Federal Wire Act is not the only federal law that serves as an impediment. The Unlawful Internet Gambling Enforcement
Act (UIGEA) still presents roadblocks to expansion of interstate gambling. This article does not address those implications, but
readers should note that UIGEA will not be applicable in intrastate bets.
5 Legislation Relating to Organized Crime Hearings on H.R. 468, H.R. 1246, H.R. 3021, H.R. 3022, H.R. 3023, H.R. 3246,
H.R. 5230, H.R. 6571, H.R. 6572, H.R. 6909, H.R. 7039 Before Subcommittee No. 5 of the Committee of the Judiciary, 87th
Cong. at 22 (1961).
6 The statute broadly defines “wire communication facility” and is applicable to modern forms of communication, including
those communications made by the internet. See United States v. Lyons, 740 F.3d 702, 716 (1st Cir. 2014). As a result, it is
almost certain that the Federal Wire Act will apply to communications with mobile sports betting apps.
7 18 U.S.C. § 1804(a).
8 The statute maintains a safe harbor provision that protects information that is transmitted for its newsworthiness, or if
information is being transmitted from one state where it is legal, to another state where it is legal. But the internet is a
decentralized form of communication, with its user unable to dictate how to transmit that information precisely.
9 The Federal Wire Act only applies to interstate betting activities, and does not criminalize lawful intrastate gambling. See
United States v. Lyon, 740 F.3d 702, 713 (1st Cir. 2014).
10 Certain cases suggest that the bettor must know that the transmissions will cross state lines, but it is unclear whether this
approach is widely adopted. See United States v. Blair, 54 F.3d 639, 641-42 (10th Cir. 1995) (holding that a crime under §
1804 is a general intent crime).
