HomePublicationsNewsletter ArchiveNewslettersVolume 21Issue 4Federal Bill to Ban Online Wagering Reintroduced

On Wednesday, February 4, 2015, Representative Jason Chaffetz (R-UT) reintroduced legislation that, if passed, would amend federal law to prohibit the expansion of Internet wagering. House Resolution 707 (“HR 707”), currently titled “To restore long-standing United States policy that the Wire Act prohibits all forms of Internet gambling, and for other purposes,” is aimed to rollback changes in the Attorney General’s interpretation of the Interstate Wire Act of 1961 (“Wire Act”) which has allowed states to permit intra-state, online wagering activity.

HR 707 was initially introduced in March of 2014 by Rep. Chaffetz, along with a companion bill in the Senate introduced by Senator Lindsey Graham (R-SC). The key language of the bill would amend the Wire Act so that it applies to “any transmission over the Internet carried interstate or in foreign commerce, incidentally or otherwise.” At this time, a Senate bill has not been reintroduced.

The legislation is in response to the Department of Justice’s (“DOJ”) Memorandum Opinion issued on September 20, 2011 that concludes that the Wire Act does not prohibit state lotteries from processing online lottery ticket transactions that are purchased in-state, but cross state lines during the transaction (i.e., when the data is processed on a server in another state). The opinion states that “we conclude that interstate transmissions of wire communications that do not relate to a ‘sporting event or contest,’ 18 USC §1084(a), fall outside of the reach of the Wire Act.” This interpretation reversed a long-standing view of the DOJ that the Wire Act applied to any gaming activity, not just sporting events, as to restrict any online gambling activity where the gambling information crossed state lines, even if only in transit to a destination in the same state. Since this interpretation, several states, including Michigan, have begun offering online lottery sales and some states, such as Nevada, New Jersey, and Delaware, have permitted intra-state online gaming operations.

In a statement made with the initial legislation last year, Rep. Chaffetz stated that “[t]he DOJ opened the door for massive change in policy without significant public input. These fundamental changes need to go through Congress. By restoring the original interpretation of the Wire Act, we are putting the genie back in the bottle and allowing for an open debate to take place.” (Emphasis in original).

The bill has been referred to the House Committee on the Judiciary. For more information, please visit the THOMAS federal legislation database, here: http://thomas.loc.gov/home/thomas.php

 

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