The Interstate Wire Act of 1961

Also known as the Federal Wire Act, the Interstate Wire Act of 1961 is currently at the forefront of debate about the legality of online betting. The federal law specifically bans the use of “wire communication facilities” such as telephones and the Internet to transmit bets and information relating to wagering on sporting events. Until recently, the Justice Department considered this law to apply to all forms of Internet wagering, but recent court rulings have changed the scope of this law and its enforcement.
In late 2011, the Justice Department released a ruling that reversed their opinion on the Interstate Wire Act of 1961. According to the ruling, the Justice Department now believes that the Federal Wire Act only applies to sports wagering and does not apply to other forms of Internet gambling – including online card rooms and casinos. The ruling came in response to plans by state officials in Illinois and New York to begin selling lottery tickets online – a plan that could have been viewed as illegal under the previous interpretation of the Federal Wire Act.
In addition to the Justice Department’s ruling on the law, the Internet Wire Act of 1961 has also been the subject of federal court scrutiny. The U.S. Fifth Circuit Court of Appeal recently ruled that the Federal Wire Act only applies to sports gambling, a ruling that the Supreme Court has yet to comment about.