The US sports betting industry has grown dramatically since the striking down of the PASPA Act in May, but another, older piece of legislation may yet threaten the fledgling sector.
Eight states have already acted to regulate sports betting, and many others are in the process of introducing a legal framework within their states, but betting across state lines may be a more complicated business. That’s because of the 1961 Wire Act, which federal legislators are having to grapple with as the debate over federal involvement with the betting industry intensifies.
The Wire Act effectively bans anyone from transmitting gambling information related to sports betting across states using any form of wire services such as telecommunications. Currently, transmitting bets between states where betting is legal is no problem, but if the signal or communication passes through an intermediary state, where betting has not been regulated, bettors enter a grey area.
The Wire Act was introduced to tackle organized crime as mafia members employed wire services to transmit data for bets on rigged sports events across the country. The Bill was designed to give federal authorities a way to target mafia operatives. It wasn’t aimed at casual sports bettors, but at a time when all sports betting was illegal, this aspect of the rules wasn’t considered. Just as significantly, the Wire Act predates the internet age.
Complicating matters further is the fact that the Federal Government rarely enforces the Wire Act. Yet it remains in force, and might at some point be used by anti-gambling politicians to target the fledgling industry. Expect to hear more about the Wire Act in 2019.