The Wire Act Applies Only To Sports Betting [article excerpts pp. 24-28]

by Ian Imrich

The Wire Act Applies Only To Sports Betting [article excerpts pp. 24-28] :

*The Wire Act does not purport to reach every form of wagering. Rather, Congress

targeted a specific problem -- sports betting -- and only those entities that actually take those bets. See In Re MasterCard Int’l Inc. Internet Gambling Litig., 313 F.3d 257, 263 (5th Cir. 2002) (“[T]he Wire Act does not prohibit non-sports internet gambling . . . .”); In re Mastercard Int’l, Inc, Nos. Civ.A.00MD-1321, 00-1322, 2003 WL 21783301, at *6 (E.D. La. Jul 30, 2003) (“[T]here is no possibility that plaintiffs can prevail on their claim that the defendants violated state law by ‘gambling over the Internet.’”).

Any other reading of this federal statute would render nearly all of the Unlawful Internet Gaming Enforcement Act (UIGEA) superfluous and, as a result, no need for the passage of that 2006 law regarding gambling vis-a-vis the internet. That cannot be the case. TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001) (“[I]t is ‘a cardinal principle of statutory construction’ that ‘a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or significant.’”) (quoting Duncan v. Walker, 533 U.S. 167, 174 (2001)).

The Wire Act’s legislative history confirms that Congress intended to limit application of the Wire Act to sporting contests and events. Indeed, Congress specifically targeted individuals “dependent upon telephone service for the placing of bets and for layoff betting on all sporting activities,” because “the availability of wire communication facilities affords opportunity for the making of bets or wagers and the exchange of related information almost to the very minute that a sporting event begins.” H.R. Rep. No. 87-967 (1961), reprinted in 1961 U.S.C.C.A.N. 2631, 2632 (emphasis added). There is no reason to believe Congress would pass a statute prohibiting all transmission of funds related to all gambling, regardless of whether it is legal under state law, without a word of legislative explanation about the effect of the statute. Instead, the legislative history repeatedly bears witness to Congress’ efforts “‘to assist the various States, territories and possessions of the United States, and the District of Columbia in the enforcement of their laws pertaining to gambling, bookmaking and like offenses and to aid in the suppression of organized gambling activities.’” Congress never suggested it was supplanting state law by banning all

interstate transmission of all forms of bets and wagers without regard to underlying state law. Rather, the testimony in support of the bill was intensely focused only on sports wagering. As then Attorney General Robert Kennedy stated in his testimony, “In addition to the unique transmission system in the field of commercialized horse race betting, the gamblers also have moved into large scale betting operations of such amateur and professional sports events such as baseball, basketball, football and boxing.

Thus, as the district court explained in Mastercard, the “recent legislative history”

reinforces what is plain on the face of the statute, “that [I]nternet gambling on a game of chance is not prohibited conduct under 18 U.S.C. § 1084.” In re MasterCard Int’l Inc., Internet Gambling Litig., 132 F. Supp. 2d 468, 480 (E.D. La. 2001), aff’d, 313 F. 3d 257 (5th Cir. 2003). If betting on a game of chance is permissible, certainly betting on a game of skill like poker is as well. Congress has since declined the opportunity to bring poker under the Wire Act while considering UIGEA by rejecting proposed amendments to the Wire Act that would have redefined the Act to expressly bring online poker within the scope of that statute in H.R. 4411 (which was never passed by the Senate) and H.R. 4777 (which was never passed by either the House or the Senate). In short, Congress deliberately targeted only sports betting in the Wire Act, and it later rejected an invitation to transform that Act into a tool for regulating online gaming.


*excepts from pages 24-28 of article -- © 2010 Law Offices of Ian J. Imrich, APC. All Rights Reserved.

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