Federal Wire Act of 1961 Explained

A good step to being a savvy online bettor is knowing the laws and restrictions that govern it; you want to assure you can play the games and attain your winnings in as safe and legal a manner possible. There is a mountain of laws and casework related to the act of online gambling, but there are a few principle laws of which every online player should make themselves familiar with, the first and foremost being the “Interstate Wire Act of 1961.” (Also and more commonly known as “The Federal Wire Act.”)

Federal Wire Act: Background Information

As the founding law for which all other internet betting acts have later built on, the plain language of the Federal Wire Act states that those in the business of betting or wagering may not make use of wired communication facilities to transmit bets, wagers, or any information regarding the placement of bets or wagers with regards to sports betting across state lines or into any foreign territories. This applies to federal sports betting laws.

What Does The Federal Wire Act Say?

The first and most important distinction to draw here as it pertains to the casual player is the classification of being “in the business of” betting and wagering. This is where the history of the bill comes into play. Then United States Attorney General Robert F. Kennedy was urging congress to pass anti-racketeering laws and was looking for ways to take shots at and weaken the strong organized crime network that was running rampant through the country at the time. The first and most primary distinction any prosecutor must make is justifying their target as being “in the business” of wagering or betting. In fact, the federal district court has since ruled that the law does not apply to “social bettors,” even those who regularly bet large sums of money, but is designed to go after large scale bookmakers who make their profits from sports betting without placing any wagers or bets themselves.

The second thing worth drawing attention to is the phrase “wired communication facility.” Unfortunately, according to the letter of the law, this does include the internet. However, upon further analysis in the language of the bill, you can see that what the Federal Wire Act prohibits is the act of wiring money across state borders or to/from foreign territories. A cursory exploration of the many verified online sportsbooks currently available will show that many of these services offer two primary forms of payouts. The first is to mail a check through the postal system, this gets around the Federal Wire Act in the most obvious way of not using any wiring service. The second way is for you to set up an account within their own network of trusted financiers for your winnings to be deposited into directly. This assures that even when you make your withdrawals from a legit sports betting site in the United States, no money has traveled across borders or state lines expressly as winnings from bets or wagers.

More: Is Online Sports Betting Legal?

Most Important Thing To Know About The Federal Wire Act

The most important thing to remember and take from the wording of The Federal Wire Act is that this is not a law designed to attack or go after players themselves. This, like most laws that hope to have an effect on the world of online sports betting are designed to attack the facilitators who collect bets and distribute winnings. Even here, the major mistake any of these usually foreign based companies can make is using the internet to wire money across any kind of border. Rest assured that any online sportsbook currently functioning has found a way to stay alive even in the current legal climate, and that there are hundreds of players every day who log on with informed decisions and collect their winnings with no interference whatsoever from The Federal Wire Act or any of its counterparts.

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