The Wire Act was which was introduced in 1961 is a United States federal law which prohibited the operation of gambling which ‘knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers.’ At this time organized crime was rife in the US with gambling in particular taking place on the black market – this Act introduced to help combat the fight against organized crime.
Although the act has been in place since 1961, how it pertained to online gambling was a very grey area, and the 1990’s and the early 2000’s saw demand for gambling at online sportsbooks, casinos and poker sites grow with millions of people from the US using these gambling sites. However this all changed in 2006 with the passing of the Unlawful Internet Gambling Enforcement Act (UIGEA), a ruling which prohibited transactions between financial institutions and gambling sites. This would see a dramatic change in the landscape, leading to many sites pulling out of the US market completely.
There have been many challenges against the act since 2006, the biggest breakthrough coming in 2011 when the Department of Justice ruled that the Wire Act only applied to sports betting, which was great news for poker and casino players, meaning the games could now be available at an intrastate level. This led to Nevada, Delaware and New Jersey passing laws that made it legal for residents to place online wagers on non-sporting events.
2011 Wire Act Ruling Challenged
However, there is now a challenge to the 2011 ruling. Utah Congressman Jason Chaffetz, a Republican, has claimed that it was wrong for the Department of Justice to make this decision, claiming such a decision should have been made by Congress. He plans to mount a ‘full push’ for the bill to be passed, which would mean a rollback to the law as it stood pre-2011.
Sheldon Adelson, the billionaire chairman of Las Vegas Sands Corp is behind this drive, stating that is was a bad business path for casinos, also claiming somewhat surprisingly that web gambling was bad as a moral proposition. Chaffetz, when asked about Adelson claimed ‘There is a lot on the line and I’m glad he agrees with me on this one’, although he denied the push was about any one person.
On the other side of the fence, the States that have introduced online gambling since 2011 claim it would be a bad policy. “We know that when policymakers examine the facts they will conclude that an online gaming ban will not only drive an existing black market further into the shadows, but will put consumers and children at even greater risk,” said spokeswoman Allison Siciliano.
Casino companies such as Caesars and MGM Resorts International also oppose the restoration of the act. They see internet gaming as an opportunity to expand their businesses online and bring in new customers and revenue streams.
The Act is called the ‘Restoration of America’s Wire Act’ and is expected to be discussed at Congress level shortly. Fans of online casinos will hope that this meets the same fate as the last attempt - and does not make it as far as the floor.
More on US Legislation and Gambling Safety
- State Regulated Online Poker (covers the NJ, DE and NV sites)