While sports betting advocates were celebrating Monday’s decision by the US Supreme Court to strike down the Professional and Amateur Sports Protection Act – and rightfully so – there are still some pretty big obstacles standing in the way.
Namely the Wire Act of 1961 and the Unlawful Internet Gambling Enforcement Act of 2006.
The Wire Act was the government’s defense against sports betting for a number of years, although that wasn’t its original intent. The key portion of the law states “Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.”
As Attorney General Robert F. Kennedy told the House Judiciary Committee in 1961, the purpose of the bill was to “assist the various States in enforcement of their laws pertaining to gambling and bookmaking.”
Kennedy did not intend for the Wire Act to serve as a federal ban against sports betting, but by his own words, act as a support mechanism for those states who had existing laws in place. If sports betting is legal in a particular state, the Wire Act doesn’t prohibit it, but instead tries to keep those from outside the state from getting involved.
We already know that William Hill is going to run the sports betting operation for the state of New Jersey and you have to believe they would like to get into other states, as well. But the Wire Act is going to make that difficult, as right now it will be illegal for William Hill to have computers in different states connected to each other.
The Daily Fantasy Sports companies which have expressed a desire to get into sports betting are going to run into similar problems.
There’s also the matter of the Unlawful Internet Gambling Enforcement Act of 2006, which makes it illegal to fund online betting accounts with credit cards, electronic funds transfers, or checks. Interestinly, the UIGEA has nothing to do with betting, but is solely focused on the financial transactions surrounding betting.
Keith Whyte, the executive director of the National Council of Problem Gambling, agreed with Walters’ statement and said “The bill is interesting, in that it doesn’t make gambling on the Internet illegal. It makes funding your wager on the Internet illegal. The financial transaction is what is criminalized here, not necessarily the state of play.”
Monday’s Supreme Court was a huge step forward for sports betting, but it also raises a number of questions and it’s a bit premature to envision a scenario where sports bettors across the country will be able to place legal bets from their computer.