The American gaming industry was thrown for a loop recently by the new DOJ sports betting decision. Congress was not vague in its intent when it enacted the Wire Act in 1961. The law, developed and supported by then-Attorney General Robert Kennedy, was never meant to establish new prohibitions on any type of gambling. Rather, it was designed to provide federal enforcement support for illegal interstate sports gambling or, as a House Judiciary report in 1961 put it, to “assist the various States and the District of Columbia in the enforcement of their laws pertaining to gambling, bookmaking, and like offenses…”

Any confusion about the law’s applicability to gambling beyond sports wagering should have been cleared up during Senate hearings on the proposal when, asked if it applied to anything other than sports betting, the Department of Justice representative unambiguously testified that it “would not cover [other games] because it is limited to sporting events or contests.”

This and other evidence is what led the department’s Office of Legal Counsel (OLC) to correctly conclude in 2011 that state online lotteries did not run afoul of the Wire Act because the law applied only to interstate sports betting and—even then—only when such activities violated state laws.

Yet, eight years after the OLC’s narrow reading of the Wire Act, the current DOJ sports betting decision flips this interpretation on its head. According to the 23-page document, the Act actually prohibits all interstate gambling online.

If one widens the scope of the analysis beyond the mere text of the law, it is painfully clear that everyone involved in the creation and enactment of the Wire Act understood and intended the law to be restricted only to illegal US sports betting. Take, for example, the title of the House Judiciary report on the Wire Act which was titled, “Sporting Events—Transmissions of Bets, Wagers, and Related Information”.

There’s also the aforementioned 1961 Senate hearing in which Sen. Estes Kefauver (D-TN) asked Assistant Attorney General Henry J. Miller if the Wire Act would prohibit the use of telephone for “numbers games,” to which Miller responded that it would not “because it is limited to sporting events or contests.” Further evidence can be found in subsequent legislative history, which is filled with failed attempts to amend the Wire Act so that it would apply to gambling beyond that related to sports.

Read the full article on the DOJ sports betting decision at the Competitive Enterprise Institute website.