The Wire Act Explained

What is the Wire Act, and does it cover online gambling? It is a 1961 federal statute that bars betting businesses from using wire communications to transmit bets across state lines. The modern dispute is whether it reaches only sports betting or also online casino and lottery games, and the main federal appeals ruling on the question says sports only.

What the statute says

The Wire Act, formally 18 U.S.C. § 1084, is titled "Transmission of wagering information; penalties." It was enacted by Public Law 87-216 on September 13, 1961, as one of several anti-racketeering bills passed that year at the urging of Attorney General Robert F. Kennedy, aimed at the interstate bookmaking networks of organized crime. In an age of telephone and telegraph lines, the "wire" was the bookmaker's lifeline.

The statute applies to a person "engaged in the business of betting or wagering" who knowingly uses a wire communication facility to transmit, in interstate or foreign commerce, bets or wagers, or information assisting in placing them, "on any sporting event or contest." Violations carry fines and up to two years in prison. The whole modern argument turns on how far that phrase about sporting events reaches: does it limit every part of the sentence, or only the first?

The Justice Department changes its mind

For decades the question barely mattered. It became pressing when states wanted to sell lottery tickets online. On September 20, 2011, the Justice Department's Office of Legal Counsel, which advises the executive branch on legal questions, issued an opinion titled "Whether the Wire Act Applies to Non-Sports Gambling." It concluded that the Act's prohibitions were limited to sports gambling, so interstate transmissions not related to a sporting event or contest fell outside it. A later entry in the Congressional Record described it as reversing 50 years of interpretation of the Act.

On December 20, 2018, the same office issued "Reconsidering Whether the Wire Act Applies to Non-Sports Gambling." This opinion reversed the 2011 view and concluded that the Wire Act is not limited to sports gambling. It was an executive-branch interpretation, not a court ruling, but it left states and lottery operators uncertain whether online non-sports gaming could suddenly be prosecuted.

The New Hampshire case

The New Hampshire Lottery Commission went to court to challenge the 2018 opinion, concerned about the risk to its lottery operations. A federal district court in New Hampshire sided with the Commission in 2019, and the government appealed. On January 20, 2021, the U.S. Court of Appeals for the First Circuit decided New Hampshire Lottery Commission v. Rosen, No. 19-1835, and held that the Wire Act's prohibitions are limited to bets or wagers on sporting events or contests.

That ruling is binding precedent only within the First Circuit, and the government did not take the case to the Supreme Court. Still, it is the leading court reading of the statute, and it matches the 2011 opinion rather than the 2018 one.

The Wire Act is often described as a blanket ban on online gambling, but the fight over it has never been about whether gambling is legal in general. It is about how to read one sentence written in 1961 for telephone bookmakers. In practice the rules for online casinos, poker and lotteries in the United States are now set mostly by individual states, while the Wire Act remains, in the courts' current reading, a sports-betting law.