The Wire Act: Why This Law Was Created and How It Impacts Gamblers Today

The Wire Act, also known as the Interstate Wire Act of 1961, restricts the ability for people to take wagers from others over wire communications. It was created to take some of the moneymaking ability away from organized gambling. The law still makes an impact many years later whenever the legality of internet gambling comes into question.

Gambling on sports and casino games has grown exponentially in recent history. And many laws have been passed by different jurisdictions in an attempt to regulate its activity. But it doesn’t look like the constant back-and-forth between gambling enthusiasts and lawmakers will ease off anytime soon.

In the United States, the Wire Act stands as one of the most impactful laws. After passing in 1961, it essentially made gambling on sporting events a federal crime. The main reason behind the law was to throw a wrench into the finances of organized crime, which always relied heavily on gambling income.

The Wire Act was aimed not at those placing wagers on sporting events. Instead, those who accepted the bets were the ones who would face legal repercussions. The law also made it illegal to collect information about the events being bet, which seemed to be a reference to the threat of athletes and gamblers conspiring to fix sporting events.

As is often the case with gambling laws, the Wire Act had unintentional consequences due to the wording of the law. In particular, there’s a gray area surrounding whether or not the law covers online betting on sports and playing at online casinos.

As a result, the state of gambling on a federal level is still largely in limbo. The legal arguments against allowing online gambling due to the Federal Wire Act of 1961 are a bit flimsy. Perhaps that’s why there haven’t been any wide-reaching prosecutions in recent years.

In addition, laws such as the 1992 Professional and Amateur Sports Protection Act (PASPA) and the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) have attempted to strengthen the stipulations of the Wire Act. But a 2018 Supreme Court decision struck down PASPA, which opened up the floodgates for states to legalize sports gambling. The Wire Act no longer possesses the strength it once did.

In the following article, we’ll explore the Wire Act and all of the ramifications that have emerged from it. We’ll talk about its origins and how it has evolved as the realm of sports gambling has changed. We’ll also look at what the Wire Act means for you as a bettor.

What Is the Wire Act?

• It is a law passed by the United States Congress in 1961.
• It was meant to stop the flow of gambling money to organized crime.
• Specifically, it made the transmission of either betting funds or information by any form of wire communication illegal in the United States.
• The Federal Wire Act targeted those collecting the bets and the money, instead of those who were actually making the wagers.
• It not only disallowed any kind of transmissions across state lines, it made even local wire communications illegal if the purpose of the communication was some sort of gambling transaction.
• The Wire Act cracked down on the state of illegal sports gambling at the time. But it was also written in a way to make it difficult for any kind of sports gambling initiative to be considered even on the local level.
• Although there have been many laws and rulings in the years since its creation (both aiding and hampering the Interstate Wire Act), it’s still technically in existence today. How it should be administered in modern times is the source of great debate between those for and against online sports betting and casino gambling.

Origins of the Wire Act

Gambling on most sporting events in the United States was considered illegal long before the Wire Act. Yet there wasn’t any law in the books that could do a lot of damage to those who took part in it.

In particular, organized crime outfits used gambling as a way of beefing up their financial reserves. This proved to be a lucrative source of income. And it also indirectly led to violence on many occasions when those who were making the bets didn’t pay up.

On top of that, the presence of gambling interests occasionally led to situations where games were “fixed” so that gamblers would profit. The most infamous examples of this include the 1919 Black Sox scandal in the World Series and the CCNY college basketball point-shaving scandal in the early 1950s.

The 1950s also saw an increase in battles between US lawmakers and major organized crime rings. That set the table for the creation of the 1961 Federal Wire Act.
Attorney General Robert F. Kennedy was the leading force behind the Wire Act in 1961. Some would say this was an ironic turn of events, since it has long been speculated that RFK’s brother John rose to the presidency in large part due to the help from organized crime interests.

In any case, the law was passed in an attempt to hit these criminals where it hurt—in their bank accounts. But, over the years, the law has turned out to have a much broader impact that many could have foreseen.

The Wire Act in the Modern Age

When the Wire Act of 1961 was passed, its references to wire communications really only referred to the telephone. Since that’s how bets were often recorded and illegal information was passed, stopping this communication flow would pretty much put a major dent on illegal sports gambling in the US.

The creators of the Federal Wire Act never could have expected the invention of the internet. The internet is also technically a form of communication by wire. As such, anything that the Wire Act stipulates could also be applied to any activity online.

On top of that, there’s a simple phrase contained in the Wire Act which has led to great legal debate. In the Act, information and money is prohibited from changing hands via interstate wire communications if it involves “any sporting event or contest.” What exactly does “or contest” mean?

Throughout the 2010s, there have been a series of contradictory judgments passed by different governmental legal bodies. Some say the phrase means that all forms of online gambling should be included under the law’s ban of wire communications. That would make everything from internet casinos to certain online lotteries illegal.

Other decisions have claimed that the Wire Act only pertains to sports gambling. According to the opposing view, none of the other activities are off-limits, at least according to this specific law. If that view stands, it’s not out of the question that the DOJ could reverse the Federal Wire Act.

Other laws have come into play that have further confused the situation. PASPA came about in 1996 and prevented states from creating new laws to enable sports gambling. Meanwhile, the UIGEA made it essentially impossible to conduct banking transactions for any kind of betting purposes.

In short, the Wire Act still creates some confusion among bettors and lawmakers. But, as you’ll see in the following sections, pro-gambling forces are certainly trending in the right direction as the Wire Act starts to lose some of its power.

How Does the Wire Act Impact US Sports Betting

The Wire Act is still on the books, so it still has some impact on the actions of sports bettors in the United States. For now, the law makes it illegal for entities to accept any kind of interstate gambling transaction. Organized crime members or even independent bookmakers would also still be liable if they were found collecting wagers on sports through some sort of wire transmission.

But a recent Supreme Court decision has largely opened the doors for many US residents to make their wagers without having to worry. In 2018, the Supreme Court declared that PASPA, which had previously stopped states from legalizing sports gambling, was unconstitutional. The Supreme Court decided that the former act trampled on the rights of individual states.

As a result, any state that wishes to can legalize their own sports gambling operation. And they can do so by allowing either brick and mortar operations or online sports gambling sites within their jurisdictions.

If you live within one of these states, you can easily make wagers on sporting events without having the Wire Act touch you. Another option is traveling to one of these states and making wagers in person. Again, there’s no issue with the Wire Act in that case.

What about online sports gambling across state or even national lines? Well, you have to remember that any laws that prohibit these acts, such as the Wire Act or UIGEA, are not aimed at the gambler. They are aimed at those taking the bets.

As a result, you don’t have to worry about any legal ramifications from betting on sports online, even if it’s outside of your state. The only issue you might have is with funding your gambling activity.

It’s possible that some credit card companies and other financial institutions are wary of participating in gambling activity within a legal gray area. But if you can find a site that accepts your wagers and some method of funding it, you should be fine.

Exemptions From the Wire Act

• You’re exempted if your home state has legalized sports gambling. For many years, Nevada was the only state to allow it due to a legal loophole. But the elimination of PASPA in 2018 has opened up the doors for many other states to take advantage.
• You’re exempted if you’re making sports wagers in person at an authorized location in a jurisdiction where sports gambling is legal. Since you would be making the bets on-site, there would be no wire communication involved. As a result, you wouldn’t be under the coverage of the Wire Act.
• You’re exempted if your gambling activity does not include sports. At the moment, the US government is not cracking down on casino gambling activities under the Wire Act. Whether that changes remains to be seen.

Wire Act FAQ

Conclusion on the Wire Act

Anyone writing a Federal Wire Act summary about its history and impact would include many twists and turns. It would have to include the way that the internet has really confused the situation. And it would also have into take into consideration how the political winds tend to blow alternately in favor of and against the law at any given time.

But it can’t be denied that the Wire Act has been relevant for far longer than other laws of the same era. Partly because of the hazy wording and partly because of changing technology, the law remains a major part of legal discussions today. Whether it again can flex its muscle as it once did in the ‘60s remains to be seen.