Public Gaming International • September/October 2014
48
When Congress has acted to regulate gambling in the past, there
often have been unintended consequences. Thus, for example, when
Congress passed the Indian Gaming Regulatory Act (the “IGRA”),
2
it “meant to spur economic opportunity and growth on poverty-
stricken and remote Indian reservations … The aim of IGRA was
Indian empowerment, … [and] many members believed [their 1988
congressional vote] was authorizing bingo parlors on remote tribal
lands.”
3
However, “[m]any of those who were meant to benefit from
IGRA have not, … [and] today, [the law] might as well be renamed
the “Law of Unintended Consequences.”
4
Similarly, Congress likely
did not anticipate that the Unlawful Internet Gambling Enforcement
Act (the “UIGEA”)
5
would result in fantasy sports league opera-
tors using it as a blueprint for daily sports-based games.
6
Finally,
when Congress passed the Wire Act in 1961,
7
the members likely
did not expect that four-decades later it would be used to prohibit
non-sports-related gambling involving wire transmissions, as it was
until the Department of Justice (“DoJ”) issued its 2011 opinion that
limited the Wire Act to sports-related gambling.
8
As stated by the
DoJ in that opinion: “The Wire Act’s legislative history reveals that
Congress’s overriding goal in the Act was to stop the use of wire
communications for sports gambling in particular.”
9
“Congress’s
decision to expressly regulate lottery-style games in addition to
sports-related gambling in [the Interstate Transportation of Wager-
ing Paraphernalia Act
10
], but not in the contemporaneous Wire Act,
further suggests that Congress did not intend to reach non-sports
wagering in the Wire Act.”
11
In this publication and elsewhere, much has been written about
the possible effects, intended and unintended, of the identical “Wire
Act fix” bills introduced on March 26, 2014 by Senator Lindsey
Graham (R-SC) and Representative Jason Chaffetz (R-UT).
12
While
those bills (collectively, the “Bill”) purport to “restore” theWireAct
to the meaning given it prior to the DoJ Opinion, they in fact would
result in the prohibition of many lottery activities that today are im-
portant to state lotteries’ revenue generating efforts.
If the Bill became law, the Wire Act would prohibit a gambling
business from using any network involving a wire or like connec-
tion, including specifically the “internet,”
13
to transmit in “interstate
or foreign commerce”:
By Mark Hichar
Hinckley Allen and Snyder, LLP
1
1) Mark Hichar is a Partner with the law firm Hinckley Allen and Snyder, LLP and the Chair of the firm’s Gaming Law Practice Group. Mark is a frequent writer and speaker on developments in Gaming
Law and related regulatory actions, and has authored several articles on developments in the laws relating to online gaming. See
/
2) 25 U.S.C. 2701, et seq.
3) “Unintended Consequences,” National Review Online, September 29, 2004, at
, last accessed August 11, 2014.
4) Id.
5) 31 U.S.C. 5361, et seq.
6) See, for example, FanDuel’s explanation of the lawfulness of its games, at:
, last accessed August 8, 2014.
7) 18 U.S.C. §§ 1081 and 1084.
8) Memorandum Opinion for the Assistant Attorney General, Criminal Division, “Whether Proposals by Illinois and New York to Use the Internet and Out-of-State Transaction Processers to Sell Lottery
Tickets to In-State Adults Violate the Wire Act,” September 20, 2011 (issued December 23, 2011) (the “DoJ Opinion”).
9) Id., at page 8.
10) 18 U.S.C. § 1953.
11) DoJ Opinion, at page 11.
12) S. 2159 and H.R. 4301, respectively.
13) “Internet” is not defined in the Bill, nor is it defined in the Wire Act (which was enacted decades before the internet existed). Thus, courts looking for its meaning would likely refer to the Unlawful
Internet Gaming Enforcement Act (the “UIGEA”) (31 U.S.C. § 5361 et seq.). There, “internet” is defined as the “international computer network of interoperable packet switched data networks.” (31 U.S.C.
§ 5362(5)).
A Federal Law
Restricting
Internet Gambling
Could Lead to
Unintended and
Devastating
Consequences for
State Lotteries
