Sports Betting: A New Frontier

. . . With Deep Roots

Jim Trusty

Ifrah PLLC

1960s Federal Sports Betting Legislation

Wire Act Prohibits the use of a “wire communications

facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers.”

Illegal Gambling Business Act Criminalizes those conducting, financing,

managing, supervising, directing, or owning an “illegal gambling business.” Illegal gambling business is defined as “a gambling business which—(i) is a violation of the law of a State or political subdivision in which it is conducted; (ii) involves five or more persons who conduct, finance, manage, supervise, direct, or own all or part of such business; and (iii) has been or remains in substantially continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 in any single day.”

Travel Act Prohibits any person from using any facility in

interstate or foreign commerce, with the intent to promote, manage, establish, carry on or facilitate “unlawful activity.” Unlawful activity is defined to include “any business enterprise involving gambling . . . in violation of the laws of the State in which they are committed or of the United States.”

Paraphernalia Act Provides that “[w]hoever . . . knowingly

carries or sends in interstate or foreign commerce any record, paraphernalia, ticket, certificate, . . . or other device used . . . in (a) bookmaking; or (b) wagering pools with respect to a sporting event . . . shall be fined under this title or imprisoned[.]” The statute provides a handful of exceptions, including for “the transportation of betting materials to be used in the placing of bets or wagers on a sporting event into a State in which such betting is legal under the statutes of that State[.]”

Federal Sports Betting Legislative History

Recognizing the growing threat of organized crime, then U.S. Attorney General Robert F. Kennedy sought to get the “bankrollers and kingpins” by introducing the Federal Wire Act in 1961, which sought to target the mob’s most profitable racket—bookkeeping on horseracing and sports gambling by prohibiting such gambling on the nation’s communication system at the time (telephone and telegraph).

While Kennedy’s testimony on his other bills

before Congress described numerous types of specific wagering activities, including lotteries, sports gambling, and numbers games, his testimony in support of the Wire Act focused explicitly and exclusively on wagering related to “horse racing” and “such amateur and professional sports events as baseball, basketball, football and boxing”—with no mention of other forms of betting.

Murphy v. NCAA

Where Is Sports Betting Legal?

An Example of the New Trend: Aquimo

Aquimo is mobile platform that allows thousands of players to compete in live skill contests at a variety of locations, ranging from sporting stadiums to restaurants to home.

Believed to be a game of skill, so legal in some states.

To ensure compliance with state and federal laws, Aquimo verifies that users are the age of majority and that they are located in a jurisdiction where such in-game wagering is legal. Geolocation is very hard to “fool.”

Conclusion

Jim Trusty, Esq.

jtrusty@ifrahlaw.com

(202) 524-4176

@TrustyLawyer