The Interstate Wire Act

The first of the major federal anti-gambling laws, the Interstate Wire Act of 1961 was passed in order to curb what the government viewed as organized-crime-related sports gambling that was taking place across state lines. Sports betting itself was not federally banned at the time, but it also was not regulated effectively (and, in many cases, at all) by various state governments throughout the US.

Seeing an opportunity, the various NY mafia families took the initiative to offer sportsbooks to eager US customers everywhere, and business was booming. To combat this, the federal authorities sought to make the main mechanism of communication fueling this industry illegal to use for such purposes. Thus, the Wire Act was born.

Robert F. Kennedy, then Attorney General in his brother’s presidential cabal, believed that the Wire Act would dissuade organized crime groups from offering sports betting going forward, saying that “modern, organized, commercial gambling operations are so completely intertwined with the nation’s communications systems that denial of their use to the gambling fraternity would be a mortal blow to their operations.” The operative thrust of the law itself is phrased thus:

“Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission...of bets or wagers...on any sporting event or contest...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.”

Problem solved, right? Well, not so much. Despite the Wire Act, underground, black market sports betting and gambling thrived under mafia administration, and it continues to do so to this day. The rise of offshore, Internet-based sportsbooks has also served to nullify the thrust of the Wire Act, neutering it almost completely.

New York Origins Of The Interstate Wire Act

The New York origins of the Interstate Wire Act are self-evident to any historian or sports betting enthusiast. In fact, the Wire Act has a history almost wholly rooted in New York City. After all, by the middle of the 20th century, New York had established itself as the gambling and sports wagering epicenter of America, at least on the business side of things. This is because the various states in the northeast (and the rest of the country, excepting Nevada, where Las Vegas was still in its relative infancy) did not have comprehensive sports betting systems or regulations in place to give their residents easy access to the popular pastime.

Of course, with such an opening came industry, particularly of the mafia-driven, under-the-table sort. As the various crime families in NY began to offer more and better sports betting options to state residents, they soon expanded their ventures across state lines. By the mid-1950s, La Cosa Nostra was running such a tight ship that the US government began to fear that their own monopolized gambling businesses – primarily state lotteries – were going to suffer unduly due to this unregulated “competition.”

As such, under the guise of curtailing violent crime and mafia activity nationwide, the aforementioned Robert Kennedy, himself a third-generation crime family operative, bade congress pass a law that would make using telephones illegal for sports betting purposes. This was quickly agreed to and passed through both houses, and Robert’s brother John – also a third-generation criminal heir – signed the bill in 1961. Both men would later be assassinated, but their ineffectual law persists to this day.

Effects Of The Interstate Wire Act On Betting Sites In New York

The effects of the Interstate Wire Act on betting sites in New York was limited, if there was in fact any appreciable effect at all. The various area crime families (at least those not holding public office) continued to offer sportsbooks to their hundreds of thousands of NY resident customers, and the popularity of sports betting in the area did not wane or fade. Instead, that popularity only grew, and New York now boasts America’s most active sports betting population.

This shouldn’t be a surprise, as prohibitions have a spotless historical track record of increasing participation in banned activities rather than dissuading such, and the government should have been aware that their efforts would be fruitless. That said, there is some merit to the idea that the Wire Act actually led many Cosa Nostra outfits to “go legit” by funneling their efforts into the burgeoning Las Vegas casino scene. The effect – which was perhaps the underlying economic intention all along – was that Sin City became America’s de facto capital for legal sports betting and gambling.

Interstate Wire Act Loophole

Future Of The Interstate Wire Act

The Interstate Wire Act is a demonstrably useless law, so you’d think there would be no problem removing it from the books. Alas, that is not what American government does with useless laws, and there is every indication that, regardless of what happens to other prominent anti-gambling laws like 1992’s Professional and Amateur Sports Protection Act (PASPA) or the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), the Wire Act is likely here for the long haul.

Even after sports betting’s federal ban is lifted and states can offer their own athletics wagering services, the Wire Act will probably be hailed as a necessary linchpin of that new model, forcing state residents to wager strictly within their own states.

Of course, there will still be gambling tourism, and New Yorkers will get the benefit of being able to cross the bridge into New Jersey to wager at any of the Atlantic City casinos if and when they finally have sportsbooks of their own. As for how the Interstate Wire Act will apply to legal online sportsbooks and offshore Internet betting shops going forward, without a substantial rewrite, it will be business as usual at all the top betting sites in New York.