The Wire Act is a 1961 law that was intended to stop racketeering and organized crime. Racketeering is a phrase used to describe participating in an illegal business–it could apply to dealing drugs, smuggling, or extortion. Al Capone, for example, was a racketeer, because almost all of his business activities were illegal.
Many states have specific laws about betting on sports, and organized crime is actively involved in breaking those laws. The Wire Act was intended to support the law in these states by making it a federal crime to place a bet using a “wire communicating facility.” A that time, a wire communicating facility was a phone, but since the advent of the Internet, it has also grown to encompass Internet communications.
What Does the Wire Act Actually Say, and What Does It Actually Mean?
The first thing the Wire Act says is that it applies to someone who’s engaged in the business of placing wagers. In other words, it doesn’t apply to casual bettors. It applies to people who are running businesses comprised of betting activities. Furthermore, it specifies that this betting consists of risking something of value on the outcome of a sporting event or contest.
The second thing that it says is that it applies to someone who’s engaged in this kind of business between state lines or between national lines. So it doesn’t necessarily apply to someone who’s taking a bet from someone in the same state, which is why it’s legal to bet on sports in certain sportsbooks in Nevada, but you can’t call them from Texas to place a wager.
Finally, it says that it applies to someone who is knowingly using these “wire communication facilities” to conduct this kind of business. So it applies to people who understand that they’re using the telephone or other similar devices to conduct this kind of business. (Also, the word “knowingly” doesn’t mean that the law doesn’t apply if the person doesn’t know about the law. It applies to whether or not the person knows that he or she is conducting this kind of business via this kind of device.)
It’s important to realize that the Wire Act was never intended to be used as a law to prosecute bettors, even if they’re making their living betting on sports. Remember, this law was enacted in order to go after organized crime. Also, if it’s legal in both states to conduct this kind of business, the Wire Act wouldn’t apply to receiving a wager over the phone from another state–but it has to be legal in BOTH states.
The leading interpretation of the Wire Act, in other words, the one most commonly used by the courts, is that it only applies to betting on sporting events. In other words, case precedent would indicate that poker or blackjack wouldn’t be covered by the Wire Act, even though a broad interpretation of the language in the Act might include blackjack or poker as a “contest.”
At one time, the Department of Justice asserted that the Wire Act applied to all forms of Internet gambling, including casino games and poker, but since then, they’ve changed their stance regarding other types of Internet gambling. They announced their new stance in December, 2011, which, of course, was after the “Black Friday” events of that year in April, when the government decided to take a different approach to shutting down online poker by using a combination of a New York State law prohibiting online poker and a federal law called UIGEA to seize control of the most popular poker cardrooms online.
There has also been some debate as to whether or not the Wire Act applies to the Internet. Since the legislators who drafted the legislation in the late 1950’s and early 1960’s had no knowledge of the Internet, it’s reasonable to assume that this doesn’t apply to the Internet. On the other hand, it’s also reasonable to assume that generic phrasing like “wire communicating facility” was used on purpose in order to cover newer technologies that were similar to traditional telephones and phone lines.
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