Does the Wire Act Apply Only to Sports Betting?

According to the federal appeals courts that have ruled on it, yes: the First Circuit held in 2021 that the prohibitions of the Wire Act, 18 U.S.C. §1084(a), "apply only to the interstate transmission of wire communications related to any 'sporting event or contest,'" agreeing with an earlier Fifth Circuit decision. The Justice Department has taken both positions over the past fifteen years, first in a 2011 legal opinion limiting the law to sports and then in a 2018 opinion reversing that view. The 2018 reading lost in court and the government did not take the case to the Supreme Court, but the question has never been settled nationwide.

What the statute actually says

The Wire Act was enacted on September 13, 1961, as Public Law 87-216. Its core prohibition, §1084(a), is a single long sentence, and nearly the entire dispute turns on how to read it:

"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."

The phrase "on any sporting event or contest" appears once, early in the sentence. The later clauses, covering communications that entitle the recipient to money or credit "as a result of bets or wagers" and "information assisting in the placing of bets or wagers," do not repeat it. One reading holds that the sports qualifier was meant to carry through the whole provision. The other holds that Congress limited only the first clause to sports and wrote the rest broadly.

The rest of the section offers clues for both sides. Subsection (b) protects news reporting "of sporting events or contests" and the transmission of betting information "on a sporting event or contest" between places where such betting is legal, which suggests the drafters had sports in mind. Subsection (c) preserves state prosecution, and subsection (d) requires common carriers to cut off service after written notice from law enforcement. The statute applies only to those "engaged in the business of betting or wagering," not to individual bettors.

The 2011 opinion: sports only

In 2011, Illinois and New York asked whether they could sell lottery tickets online to in-state adults using transaction processors located in other states. The question went to the Justice Department's Office of Legal Counsel, which gives legal advice within the executive branch.

On September 20, 2011, Virginia A. Seitz of the Office of Legal Counsel signed an opinion titled "Whether Proposals by Illinois and New York to Use the Internet and Out-of-State Transaction Processors to Sell Lottery Tickets to In-State Adults Violate the Wire Act" (2011 OLC opinion, U.S. Department of Justice). It concluded that interstate transmissions of wire communications that do not relate to a "sporting event or contest" fall outside the reach of the Wire Act. Because lotteries are not sporting events, the proposed lottery sales were not barred.

The practical effect reached well beyond lotteries. If the Wire Act covers only sports, then online poker and casino games are outside it too, leaving their legality to state law and to other federal statutes that themselves depend on state law. States began authorizing online lottery sales and, in some cases, online casino and poker games in the years that followed.

The 2018 reversal

On November 2, 2018, the Office of Legal Counsel issued a new opinion, "Reconsidering Whether the Wire Act Applies to Non-Sports Gambling," which was made public on January 14, 2019. It concluded that all but one of the prohibitions in §1084(a) are not limited to sports betting and reach any kind of bet or wager transmitted across state lines by someone in the betting business.

Read that way, the statute covered interstate wire communications connected to online lotteries, poker and casino games, even when each state involved had legalized the activity. Internet traffic routinely crosses state lines on its way between two points in the same state, which made the reading a concern for state-run lotteries and for multistate arrangements.

On January 15, 2019, Deputy Attorney General Rod Rosenstein issued a memo directing federal prosecutors to refrain from applying §1084(a) against persons who had relied on the 2011 opinion, for 90 days (Justice Department press release).

New Hampshire Lottery Commission v. Rosen

The New Hampshire Lottery Commission sued in federal district court, joined by its online lottery vendor NeoPollard Interactive and Pollard Banknote. The District of New Hampshire, in a 2019 decision by Judge Barbadoro reported at 386 F. Supp. 3d 132, held that the Wire Act applies only to transmissions related to bets or wagers on a sporting event or contest.

The government appealed. On January 20, 2021, the U.S. Court of Appeals for the First Circuit affirmed in New Hampshire Lottery Commission v. Rosen, 986 F.3d 38, in an opinion by Judge Kayatta (First Circuit opinion, No. 19-1835). The holding is stated plainly: "Like the Fifth Circuit, and the district court in this case, we therefore hold that the prohibitions of section 1084(a) apply only to the interstate transmission of wire communications related to any 'sporting event or contest.'" The Fifth Circuit decision it refers to is In re MasterCard International Inc., which had reached the same reading years earlier.

The court's reasoning drew on the text and structure of the whole statute, including the sports focus of subsection (b).

The scope of the relief deserves precision. The First Circuit affirmed the declaratory judgment and said it "binds the United States vis-à-vis NeoPollard and the [NHLC] everywhere the plaintiffs operate or would be otherwise subject to prosecution." It vacated the district court's separate order setting aside the 2018 opinion under the Administrative Procedure Act, finding that relief unnecessary. The court also did not decide the plaintiffs' alternative argument that the Wire Act does not apply to state lotteries at all. Two judges issued the opinion; a third member of the original panel heard argument but did not participate in the decision.

The government had until June 2021 to seek Supreme Court review and let the deadline pass, as the Nashua Telegraph reported on June 25, 2021.

Where the question stands, and what still applies

Three limits keep the answer from being simpler than it is.

The ruling is circuit law. The First Circuit's holding binds federal courts in its circuit, and the Fifth Circuit reached the same reading. No Supreme Court decision addresses the question, and other circuits have not been bound to follow. The declaratory judgment itself formally runs to the named plaintiffs.

Sports betting remains inside the Wire Act. The sports-only reading narrows the law; it does not repeal it. A betting business transmitting sports wagers across state lines is within §1084(a), subject to the safe harbor in §1084(b) for betting information sent between places where the betting is legal. In Murphy v. NCAA, 584 U.S. 453, which struck down the federal ban on states authorizing sports betting and held that "no provision of PASPA is severable," the Supreme Court described §1084 as a law that "outlaws the interstate transmission of information that assists in the placing of a bet on a sporting event," and observed that federal gambling statutes of this kind "apply only if the underlying gambling is illegal under state law."

UIGEA works through state law. The Unlawful Internet Gambling Enforcement Act bars a person in the business of betting from knowingly accepting credit, electronic fund transfers, checks and similar payments in connection with "unlawful Internet gambling" (31 U.S.C. §5363). That term covers a bet that is "unlawful under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made" (§5362(10)(A)). An intrastate exemption covers bets initiated and received exclusively within one state where state law expressly authorizes them and requires "age and location verification requirements reasonably designed to block access to minors and persons located out of such State" along with data security standards. Under §5362(10)(E), "the intermediate routing of electronic data shall not determine the location" of a bet, which matters for in-state wagers whose data passes through servers elsewhere. And §5361(b) states that nothing in UIGEA alters, limits or extends any federal or state law prohibiting, permitting or regulating gambling.

Put together, the federal picture for non-sports online gambling after Rosen turns mostly on state law: whether the state where the player is located has authorized the game. The Wire Act question is answered for the courts that have reached it, and answered for sports only.