Department of Justice and the Wire Act

Abstract

Barry Boss (BB): The Wire Act is in the Criminal Code, at 18 USC Section 1084. Certain types of betting and wagering, on ‘‘a sporting event or a contest,’’ are illegal. It has been used, however, by the Department of Justice, to prosecute individuals and entities that were involved in gaming beyond sporting events or contests. There had been very limited law in the area: one case in the Fifth Circuit, which held that a prosecution for something outside of a sporting event was not covered by the Wire Act, and a district court case in Utah, which had held that there was no such limitation in the Wire Act, but that it could be used more broadly. In the online poker area, which is the area with which I am most familiar, the DOJ had constantly threatened people with prosecution under the Wire Act. And, in fact, there have been at least three or four pleas that were taken, including some major ones, for individuals involved in online poker who pled guilty to Wire Act violations. And there were at least half-a-dozen seizure warrants that we know about in which the Department of Justice seized funds on a basis of a claimed violation of the Wire Act, arising from online poker. That was the backdrop for the Office of Legal Counsel’s memorandum, which came out in December of last year. There had been that split in the circuits: one circuit court had held that the Wire Act did not apply outside sporting events, and at least one district court that had said that the Wire Act did apply more broadly. The recent memorandum opinion for the Assistant Attorney General read the statute, I think, in really the only logical way you could read it, which is that the Wire Act only applies to sporting events— to sports gambling—and does not go beyond that.