Whether the Wire Act Applies to Non-Sports Gambling ( 2011 )

Whether the Wire Act Applies to Non-Sports Gambling
Interstate transmissions of wire communications that do not relate to a “sporting event or
contest” fall outside the reach of the Wire Act.
Because the proposed New York and Illinois lottery proposals do not involve wagering on
sporting events or contests, the Wire Act does not prohibit them.
September 20, 2011
MEMORANDUM OPINION FOR THE
ASSISTANT ATTORNEY GENERAL
CRIMINAL DIVISION*
You have asked for our opinion regarding the lawfulness of proposals
by Illinois and New York to use the Internet and out-of-state transaction
processors to sell lottery tickets to in-state adults. See Memorandum for
David Barron, Acting Assistant Attorney General, Office of Legal Coun-
sel, from Lanny A. Breuer, Assistant Attorney General, Criminal Division
(July 12, 2010) (“Crim. Mem.”); Memorandum for Jonathan Goldman
Cedarbaum, Acting Assistant Attorney General, Office of Legal Counsel,
from Lanny A. Breuer, Assistant Attorney General, Criminal Division
(Oct. 8, 2010) (“Crim. Supp. Mem.”). You have explained that, in the
Criminal Division’s view, the Wire Act, 18 U.S.C. § 1084 (2006), may
prohibit states from conducting in-state lottery transactions via the Inter-
net if the transmissions over the Internet during the transaction cross state
lines, and may also limit states’ abilities to transmit lottery data to out-of-
state transaction processors. You further observe, however, that so inter-
preted, the Wire Act may conflict with the Unlawful Internet Gambling
Enforcement Act (“UIGEA”), 31 U.S.C. §§ 5361–5367 (2006), because
UIGEA appears to permit intermediate out-of-state routing of electronic
data associated with lawful lottery transactions that otherwise occur in-
state. In light of this apparent conflict, you have asked whether the Wire
Act and UIGEA prohibit a state-run lottery from using the Internet to sell
tickets to in-state adults where the transmission using the Internet crosses
state lines, and whether these statutes prohibit a state lottery from trans-
* Editor’s Note: This opinion was superseded by Reconsidering Whether the Wire Act
Applies to Non-Sports Gambling, 42 Op. O.L.C. __ (Nov. 2, 2018).
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Whether the Wire Act Applies to Non-Sports Gambling
mitting lottery data associated with in-state ticket sales to an out-of-state
transaction processor either during or after the purchasing process.
Having considered the Criminal Division’s views, as well as letters
from New York and Illinois to the Criminal Division that were attached to
your opinion request, 1 we conclude that interstate transmissions of wire
communications that do not relate to a “sporting event or contest,” 18
U.S.C. § 1084(a), fall outside of the reach of the Wire Act. Because the
proposed New York and Illinois lottery proposals do not involve wagering
on sporting events or contests, the Wire Act does not, in our view, prohib-
it them. Given this conclusion, we have not found it necessary to address
the Wire Act’s interaction with UIGEA, or to analyze UIGEA in any other
respect.
I.
In December 2009, officials from the New York State Division of the
Lottery and the Office of the Governor of the State of Illinois sought the
Criminal Division’s views regarding their plans to use the Internet and
out-of-state transaction processors to sell lottery tickets to adults within
their states. See Crim. Mem. at 1; Ill. Letter; N.Y. Letter. According to its
letter to the Criminal Division, New York is finalizing construction of a
new computerized system that will control the sale of lottery tickets to in-
state customers. Most of the tickets will be printed at retail locations and
delivered to customers over the counter, but some will be “virtual tickets
electronically delivered over the Internet to computers or mobile phones
located inside the State of New York.” N.Y. Letter at 1. New York also
notes that all transaction data in the new system will be routed from the
customer’s location in New York to the lottery’s data centers in New
York and Texas through networks controlled in Maryland and Nevada. Id.
Illinois, for its part, plans to implement a pilot program to sell lottery
1 See Letter for Portia Roberson, Director, Office of Intergovernmental Affairs, from
William J. Murray, Deputy Director and General Counsel, New York Lottery (Dec. 4,
2009) (“N.Y. Letter”); Letter for Eric H. Holder, Jr., Attorney General of the United
States, from Pat Quinn, Governor, State of Illinois (Dec. 11, 2009) (“Ill. Letter”); Letter
for Bruce Ohr, Chief, Organized Crime and Racketeering Section, Criminal Division,
from John W. McCaffrey, General Counsel, Illinois Department of Revenue (Mar. 10,
2010); Department of Revenue and Illinois Lottery, State of Illinois Internet Lottery Pilot
Program (Mar. 10, 2010) (“Ill. White Paper”).
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35 Op. O.L.C. 134 (2011)
tickets to adults over the Internet, with sales restricted by geolocation
technology to “transactions initiated and received or otherwise made
exclusively within the State of Illinois.” Ill. Letter at 2 (citation and
internal quotation marks omitted). Illinois characterizes its program as “an
intrastate lottery, despite the fact that packets of data may intermediately
be routed across state lines over the Internet.” Ill. White Paper at 12
(italics omitted). Both states argue in their submissions to the Criminal
Division that the Wire Act is inapplicable because it does not cover com-
munications related to non-sports wagering, and that their proposed lotter-
ies are lawful under UIGEA. Id. at 11–12; N.Y. Letter at 3.
In the Criminal Division’s view, both the New York and Illinois Inter-
net lottery proposals may violate the Wire Act. Crim. Mem. at 3. The
Criminal Division notes that “[t]he Department has uniformly taken the
position that the Wire Act is not limited to sports wagering and can be
applied to other forms of interstate gambling.” Id. at 3; see also Crim.
Supp. Mem. at 1–2. The Division also explains that “the Department has
consistently argued under the Wire Act that, even if the wire communica-
tion originates and terminates in the same state, the law’s interstate com-
merce requirement is nevertheless satisfied if the wire crossed state lines
at any point in the process.” Crim. Mem. at 3; see also Crim. Supp. Mem.
at 2. Taken together, these interpretations of the Wire Act “lead[] to the
conclusion that the [Act] prohibits” states from “utiliz[ing] the Internet to
transact bets or wagers,” even if those bets or wagers originate and termi-
nate within the state. Crim. Supp. Mem. at 2.
The Criminal Division further notes, however, that reading the Wire
Act in this manner creates tension with UIGEA, which appears to permit
out-of-state routing of data associated with in-state lottery transactions.
Crim. Mem. at 4–5. UIGEA prohibits any person engaged in the business
of betting or wagering from accepting any credit or funds from another
person in connection with the latter’s participation in “unlawful Internet
gambling.” 31 U.S.C. § 5363; see Crim. Mem. at 3. Under UIGEA, “un-
lawful Internet gambling” means “to place, receive, or otherwise know-
ingly transmit a bet or wager by any means which involves the use, at
least in part, of the Internet” in a jurisdiction where applicable federal or
state law makes such a bet illegal. 31 U.S.C. § 5362(10)(A). Critically,
however, UIGEA specifies that “unlawful Internet gambling” does not
include bets “initiated and received or otherwise made exclusively within
a single State,” id. § 5362(10)(B), and expressly provides that “[t]he
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Whether the Wire Act Applies to Non-Sports Gambling
intermediate routing of electronic data shall not determine the location or
locations in which a bet or wager is initiated, received, or otherwise
made,” id. § 5362(10)(E).
The Criminal Division is thus concerned that the Wire Act may crimi-
nalize conduct that UIGEA suggests is lawful. On the one hand, the
Criminal Division believes that the New York and Illinois lottery plans
violate the Wire Act because they will involve Internet transmissions that
cross state lines or the transmission of lottery data to out-of-state transac-
tion processors. Crim. Mem. at 4; Crim. Supp. Mem. at 2. On the other
hand, the Division acknowledges that state-run intrastate lotteries are
lawful and that UIGEA specifically provides that the kind of “intermedi-
ate routing” of lottery transaction data contemplated by New York and
Illinois cannot in itself render a lottery transaction interstate. Crim. Supp.
Mem. at 2; Crim. Mem. at 4–5. The Criminal Division further notes that
the conclusion that the Wire Act prohibits state lotteries from making in-
state sales over the Internet creates “a potential oddity of circumstances”
in which “the use of interstate commerce,” rather than simply supplying a
jurisdictional hook for conduct that is already wrongful, would transform
otherwise lawful activity—state-run in-state lottery transactions—into
wrongful conduct under the Wire Act. Crim. Supp. Mem. at 2. 2
In light of this tension, the Criminal Division asked this Office to pro-
vide an opinion addressing whether the Wire Act and UIGEA prohibit
state-run lotteries from using the Internet to sell tickets to in-state adults
(a) where the transmission over the Internet crosses state lines, or (b)
where the lottery transmits lottery data across state lines to an out-of-state
transaction processor. Crim. Mem. at 5; Crim. Supp. Mem. at 1.
II.
The Criminal Division’s conclusion that the New York and Illinois lot-
tery proposals may be unlawful rests on the premise that the Wire Act
prohibits interstate wire transmissions of gambling-related communica-
tions that do not involve “any sporting event or contest.” See Crim. Mem.
at 3; Crim. Supp. Mem. at 2. As noted above, both Illinois and New York
dispute this premise, contending that the Wire Act prohibits only trans-
2 State-run lotteries are exempt from many federal anti-gambling prohibitions. See,
e.g., 18 U.S.C. §§ 1307, 1953(b)(4) (2006).
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35 Op. O.L.C. 134 (2011)
missions concerning sports-related wagering. See Ill. White Paper at 11–
12; N.Y. Letter at 3; see also In re Mastercard Int’l, Inc., Internet Gam-
bling Litig., 132 F. Supp. 2d 468, 480 (E.D. La. 2001) (“[A] plain reading
of the statutory language clearly requires that the object of the gambling
be a sporting event or contest.”), aff’d, 313 F.3d 257 (5th Cir. 2002). The
sparse case law on this issue is divided. Compare, e.g., Mastercard, 313
F.3d at 262–63 (holding that the Wire Act does not extend to non-sports
wagering), with United States v. Lombardo, 639 F. Supp. 2d 1271, 1281
(D. Utah 2007) (taking the opposite view), and Report and Recommenda-
tion of United States Magistrate Judge Regarding Gary Kaplan’s Motion
to Dismiss Counts 3–12, at 4–6, United States v. Kaplan, No. 06-CR-
337CEJ (E.D. Mo. Mar. 20, 2008) (same). 3 We conclude that the Criminal
Division’s premise is incorrect and that the Wire Act prohibits only the
transmission of communications related to bets or wagers on sporting
events or contests.
The relevant portion of the Wire Act, section 1084(a), provides:
Whoever being engaged in the business of betting or wagering
knowingly uses a wire communication 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 for the transmission of a wire communication which enti-
tles the recipient to receive money or credit as a result of bets or wa-
gers, or for information assisting in the placing of bets or wagers,
shall be fined under this title or imprisoned not more than two years,
or both.
18 U.S.C. § 1084(a) (codifying Pub. L. No. 87-216, § 2, 75 Stat. 491
(1961)). 4
3 A New York court also found that section 1084(a) applied to gambling in the form of
“virtual slots, blackjack, or roulette,” but did so without analyzing the meaning of the
“sporting event or contest” qualification. See New York v. World Interactive Gaming
Corp., 714 N.Y.S.2d 844, 847, 851–52 (N.Y. Sup. Ct. 1999).
4 The Wire Act defines “wire communication facility” as “any and all instrumentali-
ties, personnel, and services (among other things, the receipt, forwarding, or delivery of
communications) used or useful in the transmission of writings, signs, pictures, and
sounds of all kinds by aid of wire, cable, or other like connection between the points of
origin and reception of such transmission.” 18 U.S.C. § 1081 (2006).
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Whether the Wire Act Applies to Non-Sports Gambling
This provision contains two broad clauses. The first bars anyone en-
gaged in the business of betting or wagering from knowingly using a wire
communication 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.” Id. The second bars any such
person from knowingly using a wire communication facility to transmit
communications that entitle the recipient to “receive money or credit”
either “as a result of bets or wagers” or “for information assisting in the
placing of bets or wagers.” Id. 5
Our question is whether the term “on any sporting event or contest”
modifies each instance of “bets or wagers” in section 1084(a) or only the
5 The Criminal Division reads this second clause of section 1084(a) as if it were two
separate clauses: the first prohibiting the use of a wire communication facility “for the
transmission of a wire communication which entitles the recipient to receive money or
credit as a result of bets or wagers,” and the second prohibiting the use of a wire commu-
nication facility “for information assisting in the placing of bets or wagers.” See Crim.
Mem. at 3; Crim. Supp. Mem. at 1 n.1. We do not find this reading convincing. Under that
reading, the latter clause would prohibit the “use[] [of] a wire communication facility . . .
for information assisting in the placing of bets or wagers,” but it is unclear what, if
anything, “us[ing]” a wire communication facility “for information” would mean. This
difficulty could be remedied by reading the phrase “the transmission of” into the statute.
However, doing so would both add words to the text and make the last clause in section
1084(a)—prohibiting use of a wire facility “for [the transmission of] information assisting
in the placing of bets or wagers”—overlap with the first part of section 1084(a), which
prohibits using wire communications for “the transmission . . . of . . . information assist-
ing in the placing of bets or wagers on any sporting event or contest.” This redundancy
counsels against the Criminal Division’s reading. See, e.g., Hibbs v. Winn, 542 U.S. 88,
101 (2004) (invoking “rule against superfluities”). We believe the second half of section
1084(a) is better read as a single prohibition barring “the transmission of a wire commu-
nication which entitles the recipient to receive money or credit [either] as a result of bets
or wagers[] or for information assisting in the placing of bets or wagers.” 18 U.S.C.
§ 1084(a) (emphasis added). This reading avoids the illogic and redundancy of the first
reading. It is also supported by the Wire Act’s legislative history, which characterizes the
second half of section 1084(a) as a provision that would prohibit “the transmission of wire
communications which entitle the recipient to receive money as the result of betting or
wagering,” S. Rep. No. 87-588, at 2 (1961)—not as a set of two provisions that both
would prohibit the transmission of wire communications entitling the recipients to receive
money or credit as a result of bets or wagers and broadly bar the transmission of infor-
mation assisting in the placing of bets or wagers. See H.R. Rep. No. 87-967, at 2 (1961)
(subsection (a) “also prohibits the transmission of a wire communication which entitled
the recipient to receive money or credit as a result of a bet or wager or for information
assisting in the placing of bets or wagers”).
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35 Op. O.L.C. 134 (2011)
instance it directly follows. The second part of the first clause clearly
prohibits a person who is engaged in the business of betting or wagering
from knowingly using a wire communication facility to transmit “infor-
mation assisting in the placing of bets or wagers on any sporting event or
contest” in interstate or foreign commerce. Id. § 1084(a). It is less clear
that the “sporting event or contest” limitation also applies to the first part
of the first clause, prohibiting the use of a wire communication facility to
transmit “bets or wagers” in interstate or foreign commerce, or to the
second clause, prohibiting 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.”
Id. For the reasons set forth below, we conclude that both provisions are
limited to bets or wagers on or wagering communications related to sport-
ing events or contests. We begin by discussing the first part of the first
clause, and then turn to the second clause.
A.
In our view, it is more natural to treat the phrase “on any sporting event
or contest” in section 1084(a)’s first clause as modifying both “the trans-
mission in interstate or foreign commerce of bets or wagers” and “infor-
mation assisting in the placing of bets or wagers,” rather than as modify-
ing the latter phrase alone. The text itself can be read either way—it does
not, for example, contain a comma after the first reference to “bets or
wagers,” which would have rendered our proposed reading significantly
less plausible. By the same token, the text does not contain commas after
each reference to “bets or wagers,” which would have rendered our pro-
posed reading that much more certain. See 18 U.S.C. § 1084(a) (“Whoev-
er being engaged in the business of betting or wagering knowingly uses a
wire communication 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[.]”).
Reading “on any sporting event or contest” to modify “the transmission
. . . of bets or wagers” produces the more logical result. The text could be
read to forbid the interstate or foreign transmission of bets and wagers of
all kinds, including non-sports bets and wagers, while forbidding the
transmission of information to assist only sports-related bets and wagers.
But it is difficult to discern why Congress, having forbidden the transmis-
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Whether the Wire Act Applies to Non-Sports Gambling
sion of all kinds of bets or wagers, would have wanted to prohibit only the
transmission of information assisting in bets or wagers concerning sports,
thereby effectively permitting covered persons to transmit information
assisting in the placing of a large class of bets or wagers whose transmis-
sion was expressly forbidden by the clause’s first part. See id.; see also id.
§ 1084(b) (providing exceptions for news reporting, and for transmissions
of wagering information from one state where betting is legal to another
state where betting is legal, both expressly relating to “sporting events or
contests”). The more reasonable inference is that Congress intended the
Wire Act’s prohibitions to be parallel in scope, prohibiting the use of wire
communication facilities to transmit both bets or wagers and betting or
wagering information on sporting events or contests. Given that this
interpretation is an equally plausible reading of the text and makes better
sense of the statutory scheme, we believe it is the better reading of the
first clause. See Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 222 (2008)
(“[O]ur construction . . . must, to the extent possible, ensure that the
statutory scheme is coherent and consistent.”).
The legislative history of section 1084(a) supports this conclusion. As
originally proposed, section 1084(a) would have imposed criminal penal-
ties on anyone who “leases, furnishes, or maintains any wire communica-
tion facility with intent that it be used 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.” S. 1656,
87th Cong. § 2 (1961) (as introduced) (emphasis added). The commas
around the phrase “or information assisting in the placing of bets or
wagers” make clear that the phrase “on any sporting event or contest”
modifies both “bets or wagers” and “information assisting in the placing
of bets or wagers.”
In redrafting section 1084(a), the Senate Judiciary Committee altered
the provision’s first clause, changing the class of covered persons and
removing the commas after both references to “wagers,” and added a
second clause prohibiting transmissions relating to “money or credit”
(which we discuss below in section II.B). The Senate Judiciary Commit-
tee Report noted that the purpose of this amendment was to limit the
subsection’s reach to persons engaged in the gambling business, and to
expand its reach to include “money or credit” communications:
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35 Op. O.L.C. 134 (2011)
The second amendment changes the language of the bill, as intro-
duced (which prohibited the leasing, furnishing, or maintaining of
wire communication facility with intent that it be used for the trans-
mission in interstate or foreign commerce of bets or wagers), to pro-
hibit the use of wire communication facility by persons engaged in
the business of betting or wagering, in the belief that the individual
user, engaged in the business of betting or wagering, is the person at
whom the proposed legislation should be directed; and has further
amended the bill to prohibit the transmission of wire communica-
tions which entitle the recipient to receive money as the result of bet-
ting or wagering which is designed to close another avenue utilized
by gamblers for the conduct of their business.
S. Rep. No. 87-588, at 2 (1961). Nothing in the legislative history of this
amendment suggests that, in deleting the commas around “or information
assisting in the placing of bets or wagers” and adding section 1084(a)’s
second clause, Congress intended to expand dramatically the scope of
prohibited transmissions from “bets or wagers . . . on any sporting event
or contest” to all “bets or wagers,” or to introduce a counterintuitive
disparity between the scope of the statute’s prohibition on the transmis-
sion of bets or wagers and the scope of its prohibition on the transmission
of information assisting in the placing of bets or wagers. See also 107
Cong. Rec. 13,901 (1961) (explanation of S. 1656, Prohibiting Transmis-
sion of Bets by Wire Communications, submitted for the record by Sen.
Eastland, Chairman, S. Judiciary Comm.) (describing Senate Judiciary
Committee’s two major amendments to S. 1656 without mentioning an
expansion of prohibited wagering to reach non-sports wagering); cf.
Report of Proceedings: Hearing Before the S. Comm. on the Judiciary,
Exec. Sess., 87th Cong. 55 (1961) (statement of Byron R. White, Deputy
Att’y Gen.) (the bill, as amended, “is aimed now at those who use the
wire communication facility for the transmission of bets or wagers in
connection with a sporting event”). 6 Given that such changes would have
6 The legislative history indicates that the Department of Justice played a significant
role in drafting S. 1656 as part of the Attorney General’s program to fight organized
crime and syndicated gambling. See, e.g., S. Rep. No. 87-588, at 3 (noting that S. 1656
was introduced by the committee chairman on the recommendation of the Attorney
General); The Attorney General’s Program to Curb Organized Crime and Racketeering:
Hearings on S. 1653, S. 1654, S. 1655, S. 1656, S. 1657, S. 1658, S. 1665 Before the S.
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Whether the Wire Act Applies to Non-Sports Gambling
significantly altered the scope of the statute, we think this absence of
comment in the legislative history is significant. Cf. Whitman v. Am.
Trucking Ass’ns, 531 U.S. 457, 468 (2001) (“Congress . . . does not, one
might say, hide elephants in mouseholes.”).
B.
We likewise conclude that the phrase “on any sporting event or con-
test” modifies section 1084(a)’s second clause, which prohibits “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.” 18 U.S.C. § 1084(a). The
qualifying phrase “on any sporting event or contest” does not appear in
this clause. But in our view, the references to “bets or wagers” in the
second clause are best read as shorthand references to the “bets or wa-
gers on any sporting event or contest” described in the first clause.
Although Congress could have made such an intent even clearer by
writing “such bets or wagers” in the second clause, the text itself is con-
sistent with our interpretation. And the interpretation gains support from
the fact that the phrase “in interstate and foreign commerce” is likewise
omitted from the second clause, even though Congress presumably in-
tended all the prohibitions in the Wire Act, including those in the second
clause, to be limited to interstate or foreign (as opposed to intrastate) wire
communications. See Crim. Mem. at 3 (to violate the Wire Act, the wire
communication must “cross[] state lines”); see also, e.g., H.R. Rep. No.
87-967, at 1–2 (“The purpose of the bill is to . . . aid in the suppression of
organized gambling activities by prohibiting the use of wire communica-
tion facilities which are or will be used for the transmission of bets or
wagers and gambling information in interstate and foreign commerce.”)
Comm. on the Judiciary, 87th Cong. 12 (1961) (“Senate Hearings”) (statement of Robert
F. Kennedy, Att’y Gen.) (“We have drafted this statute carefully to protect the freedom of
the press.”), quoted in S. Rep. No. 87-588, at 3; Report of Proceedings: Hearing Before
the S. Comm. on the Judiciary, Exec. Sess., 87th Cong. 54–55 (1961) (statement of Byron
R. White, Deputy Att’y Gen.) (describing amendments to S. 1656 negotiated by the
Justice Department); Legislation Relating to Organized Crime: Hearings on H.R. 468,
H.R. 1246, H.R. 3021, H.R. 3022, H.R. 3023, H.R. 3246, H.R. 5230, H.R. 6571, H.R.
6572, H.R. 6909, H.R. 7039 Before Subcomm. No. 5 of the H. Comm. on the Judiciary,
87th Cong. 5 (1961) (“House Hearings”) (statement of Rep. McCulloch) (referring to “the
legislative proposals of the Kennedy administration”).
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35 Op. O.L.C. 134 (2011)
(emphasis added). This omission suggests that Congress used shortened
phrases in the second clause to refer back to terms spelled out more com-
pletely in the first clause.
Reading the entire subsection, including its second clause, as limited to
sports-related betting also makes functional sense of the statute. Cf. Cor-
ley v. United States, 129 S. Ct. 1558, 1567 n.5 (2009) (construing the
statute as a whole to avoid “the absurd results of a literal reading”). On
this reading, all of section 1084(a)’s prohibitions serve the same end,
forbidding wagering, information, and winnings transmissions of the same
scope: No person may send a wire communication that places a bet on a
sporting event or entitles the sender to receive money or credit as a result
of a sports-related bet, and no person may send a wire communication that
shares information assisting in the placing of a sports-related bet or enti-
tles the sender to money or credit for sharing information that assisted in
the placing of a sports-related bet.
Reading section 1084(a) to contain some prohibitions that apply solely
to sports-related gambling activities and other prohibitions that apply to
all gambling activities, in contrast, would create a counterintuitive patch-
work of prohibitions. If the provision’s second clause is read to apply to
all bets or wagers, section 1084(a) as a whole would prohibit using a wire
communication facility to place bets or to provide betting information
only when sports wagering is involved, but would prohibit using a wire
communication facility to transmit any and all money or credit communi-
cations involving wagering, whether sports-related or not. We think it is
unlikely that Congress would have intended to permit wire transmissions
of non-sports bets and wagers, but prohibit wire transmissions through
which the recipients of those communications would become entitled to
receive money or credit as a result of those bets. We think it similarly
unlikely that Congress would have intended to allow the transmission of
information assisting in the placing of bets or wagers on non-sporting
events, but then prohibit transmissions entitling the recipient to receive
money or credit for the provision of information assisting in the placing of
those lawfully-transmitted bets.
The legislative history of section 1084(a) supports our reading of the
text. Cf. Pub. Citizen v. Dep’t of Justice, 491 U.S. 440, 454 (1989)
(“Where the literal reading of a statutory term would ‘compel an odd
result,’ we must search for other evidence of congressional intent to lend
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Whether the Wire Act Applies to Non-Sports Gambling
the term its proper scope.”) (quoting Green v. Bock Laundry Mach. Co.,
490 U.S. 504, 509 (1989)); cf. Green, 490 U.S. at 527 (Scalia, J., concur-
ring) (finding it “entirely appropriate to consult all public materials,
including the background of [Federal] Rule [of Evidence] 609(a)(1) and
the legislative history of its adoption, to verify that what seems to us an
unthinkable disposition . . . was indeed unthought of, and thus to justify a
departure from the ordinary meaning of the word ‘defendant’ in the
Rule”). To begin, when Congress revised the Wire Act during the legisla-
tive process to add the second clause, it indicated (as noted above) that its
purpose in doing so was to “further amend[] the bill to prohibit the trans-
mission of wire communications which entitle the recipient to receive
money as the result of betting or wagering[,] which is designed to close
another avenue utilized by gamblers for the conduct of their business.”
S. Rep. No. 87-588, at 2. There is no indication that Congress intended
the prohibition on money or credit transmissions to sweep substantially
more broadly than the underlying prohibitions on betting, wagering, and
information communications, let alone any discussion of any rationale
behind such a counterintuitive scheme. Cf. Am. Trucking, 531 U.S. at 468.
More broadly, 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. Congress was principally focused on off-
track betting on horse races, but also expressed concern about other
sports-related events or contests, such as baseball, basketball, football,
and boxing. The House Judiciary Committee Report, for example, ex-
plains:
Testimony before your Committee on the Judiciary revealed that
modern bookmaking depends in large measure on the rapid transmis-
sion of gambling information by wire communication facilities. For
example, at present, the immediate receipt of information as to re-
sults of a horserace permits a bettor to place a wager on a successive
race. Likewise, bookmakers are dependent upon telephone service
for the placing of bets and for layoff betting on all sporting events.
The availability of wire communication facilities affords opportunity
for the making of bets or wagers and the exchange of related infor-
mation almost to the very minute that a particular sporting event be-
gins.
145
35 Op. O.L.C. 134 (2011)
H.R. Rep. No. 87-967, at 2; see also 107 Cong. Rec. 16,533 (1961)
(statement of Rep. Celler, Chairman, H. Judiciary Comm.) (“This particu-
lar bill involves the transmission of wagers or bets and layoffs on horse-
racing and other sporting events.”); House Hearings, supra note 6, at 24–
26 (statement of Robert F. Kennedy, Att’y Gen.) (describing horse racing
bookmaking operations and the importance to the bookmaker of rapid
inbound and outbound communications); House Hearings, supra note 6, at
236–38 (statement of Frank D. O’Connor, District Attorney, Long Island
City, N.Y.) (describing the operation of the Delaware Sports Service, a
wire service that enables bookies and gambling syndicates to lay off
horse race bets with other bookies, reduce odds on a horse, and even cheat
by taking bets after a race has finished).
Legislative history from the Senate similarly suggests that Congress’s
motive in enacting the Wire Act was to combat sports-related betting. The
Explanation of S. 1656, Prohibiting Transmission of Bets by Wire Com-
munications, provided by Chairman Eastland during the Senate debate,
describes the problem addressed by the legislation this way:
Information essential to gambling must be readily and quickly avail-
able. Illegal bookmaking depends upon races at about 20 major race-
tracks throughout the country, only a few of which are in operation
at any one time. Since the bookmaker needs many bets in order to
operate a successful book, he needs replays, including money on
each race. Bettors will bet on successive races only if they know
quickly the results of the prior race and the bookmaker cannot accept
bets without the knowledge of the results of each race. Thus, infor-
mation so quickly received as to be almost simultaneous, prior to,
during, and immediately after each race with regard to starting horse,
scratches of entries, probable winners, betting odds, results and the
prices paid, is essential to both the illegal bookmaker and his cus-
tomers.
107 Cong. Rec. 13,901 (1961); see also S. Rep. No. 87-588, at 4 (quoting
Letter for Vice President, U.S. Senate, from Robert F. Kennedy, Att’y
Gen. (Apr. 6, 1961)); Senate Hearings, supra note 6, at 12 (statement of
Robert F. Kennedy, Att’y Gen.) (“The people who will be affected [by S.
1656] are the bookmakers and the layoff men, who need incoming and
outgoing wire communications in order to operate.”).
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Whether the Wire Act Applies to Non-Sports Gambling
Although Congress was most concerned about horse racing, testimony
during the hearings also highlighted the increasing importance of rapid
wire communications to “large-scale betting operations” involving other
professional and amateur sporting events, such as baseball, basketball,
football, and boxing. House Hearings, supra note 6, at 25 (statement of
Robert F. Kennedy, Att’y Gen.). The Attorney General testified, for
instance, that recent disclosures revealed that gamblers had bribed college
basketball players to shave points on games, and that up-to-the-minute
information regarding “the latest ‘line’ on the contest,” “late injuries to
key players,” and the like was critical to bookmakers. Id.; accord Senate
Hearings, supra note 6, at 6 (statement of Robert F. Kennedy, Att’y
Gen.); see also House Hearings, supra note 6, at 272 (statement of Nathan
Skolnik, N.Y. Comm’n of Investigation) (bookmakers handling illegal
baseball, basketball, football, hockey, and boxing wagering need wire
communications to obtain “the line,” to make layoff bets, and to receive
race results); id. at 298–99 (statement of Dan F. Hazen, Assistant Vice
President, W. Union Tel. Co.) (discussing baseball-sports ticker installa-
tions refused or removed by Western Union because of illegal use). This
focus on sports-related betting makes sense, as the record before Congress
indicated that sports bookmaking was the principal gambling activity for
which crime syndicates were using wire communications at the time. See
Charles P. Ciaccio, Jr., Internet Gambling: Recent Developments and
State of the Law, 25 Berkeley Tech. L.J. 529, 537 (2010); see also Senate
Hearings, supra note 6, at 277–78 (testimony of Herbert Miller, Assistant
Attorney General, Criminal Division). 7
7 As noted above, the Justice Department played a key role in drafting S. 1656, and it
understood the bill to reach only the use of wire communications for sports-related
wagering and communications. The colloquy between Mr. Miller and Senator Kefauver,
chairman of a committee that held hearings to investigate organized crime and gambling
in the 1950s, underscores that Congress was well aware of that understanding:
SENATOR KEFAUVER. The bill [S. 1656] on page 2 seems to be limited to sporting
events or contests. Why do you not apply the bill to any kind of gambling activities,
numbers rackets, and so forth?
MR. MILLER. Primarily for this reason, Senator: The type of gambling that a tele-
phone is indispensable to is wagers on a sporting event or contest. Now, as a practi-
cal matter, your numbers game does not require the utilization of communications
facilities.
...
147
35 Op. O.L.C. 134 (2011)
Our conclusion that section 1084(a) is limited to sports betting finds
additional support in the fact that, on the same day Congress enacted the
Wire Act, it also passed another statute in which it expressly addressed
types of gambling other than sports gambling, including gambling known
as the “numbers racket,” which involved lottery-style games. In address-
ing these forms of gambling, Congress used terms wholly different from
those employed in the Wire Act. For example, the Interstate Transporta-
tion of Wagering Paraphernalia Act, Pub. L. No. 87-218, 75 Stat. 492
(1961) (codified at 18 U.S.C. § 1953), specifically prohibits the interstate
transportation of wagering paraphernalia, including materials used in
lottery-style games such as numbers, policy, and bolita. 8 Subject to ex-
emptions, the statute provides, in part:
Whoever, except a common carrier in the usual course of its busi-
ness, knowingly carries or sends in interstate or foreign commerce
any record, paraphernalia, ticket, certificate, bills, slip, token, paper,
writing, or other device used, or to be used, or adapted, devised, or
designed for use in (a) bookmaking; or (b) wagering pools with re-
spect to a sporting event; or (c) in a numbers, policy, bolita, or simi-
lar game shall be fined under this title or imprisoned for not more
than five years or both.
18 U.S.C. § 1953(a) (2006). The legislative history indicates that the
reference to “a numbers, policy, bolita, or similar game” under subpart (c)
SENATOR KEFAUVER. I can see that telephones would be used in sporting contests,
and it is used quite substantially in the numbers games, too.
How about laying off bets by the use of telephones and laying off bets in bigtime
gambling? Does that not happen sometimes?
MR. MILLER. We can see that this statute will cover it. Oh, you mean gambling on
other than a sporting event or contest?
SENATOR KEFAUVER. Yes.
MR. MILLER. This bill, of course, would not cover that because it is limited to
sporting events or contests.
Senate Hearings, supra note 6, at 277–78.
8 As Assistant Attorney General Herbert Miller explained, “numbers, policy, and boli-
ta[] are similar types of lotteries wherein an individual purchases a ticket with a number.”
House Hearings, supra note 6, at 350; see generally National Institute of Law Enforce-
ment and Criminal Justice, U.S. Dep’t of Justice, The Development of the Law of Gam-
bling: 1776–1976, at 748–52 (1977) (describing the numbers game and lotteries).
148
Whether the Wire Act Applies to Non-Sports Gambling
of this provision was intended to cover lotteries. See H.R. Rep. No. 87-
968, at 2 (1961); see also House Hearings, supra note 6, at 29–30 (1961)
(statement of Robert F. Kennedy, Att’y Gen.) (highlighting the need for
legislation prohibiting the interstate transportation of wagering parapher-
nalia to help suppress “lottery traffic” and to close loopholes created by
judicial decisions).
Congress thus expressly distinguished these lottery games from
“bookmaking” or “wagering pools with respect to a sporting event,” and
made explicit that the Interstate Transportation of Wagering Paraphernalia
Act applied to all three forms of gambling. 18 U.S.C. § 1953(a). 9 Con-
gress’s decision to expressly regulate lottery-style games in addition to
sports-related gambling in that statute, but not in the contemporaneous
Wire Act, further suggests that Congress did not intend to reach non-
sports wagering in the Wire Act. See Dooley v. Korean Air Lines Co., 524
U.S. 116, 124 (1998) (construing one federal statute in light of another
congressional enactment the same year). 10
9 The Supreme Court later held that 18 U.S.C. § 1953 barred the interstate transporta-
tion of records, papers, and writings in connection with a sweepstake race operated by the
state of New Hampshire. United States v. Fabrizio, 385 U.S. 263, 266 –70 (1966). In
1975, Congress amended the statute to exempt “equipment, tickets, or materials used or
designed for use within a State in a lottery conducted by that State acting under authority
of State law,” Pub. L. No. 93-583, sec. 3, § 1953(b)(4), 88 Stat. 1916, 1916 (1975), and
established a new provision exempting state-conducted lotteries from statutory re-
strictions governing lotteries in 18 U.S.C. §§ 1301–1304, Pub. L. No. 93-583, sec. 1,
§ 1307, 88 Stat. at 1916. No similar exemption for state lotteries was added to the Wire
Act.
10 The legislative history of the Wire Act does contain numerous references to “gam-
bling information.” However, in context, this term is best read as a reference to the
specific kinds of gambling information covered by the statute being discussed, not
evidence of an independent intent to include other kinds of gambling information within
the scope of the statute—let alone an intent to include that other kind of information only
with respect to money or credit communications. See, e.g., H.R. Rep. No. 87-967, at 3
(citing the exemption in section 1084(b) for the transmission of “gambling information”
from “a State where the placing of bets and wagers on a sporting event is legal, to a State
where betting on that particular event is legal,” even though section 1084(b) does not
refer to “gambling information”); House Hearings, supra note 6, at 353–54 (referring, in
discussing H.R. 7039, 87th Cong. (1961), to “[o]ur purpose [being] to prohibit the inter-
state transmission of gambling information which is essential to the gambling fraternity,”
even though H.R. 7039 did not refer to “gambling information” but would have prohibited
the transmission of wagers and wagering information only with respect to a “sporting
event or contest”).
149
35 Op. O.L.C. 134 (2011)
In sum, the text of the Wire Act and the relevant legislative materials
support our conclusion that the Act’s prohibitions relate solely to sports-
related gambling activities in interstate and foreign commerce. 11
III.
What remains for resolution is only whether the lotteries proposed by
New York and Illinois involve “sporting event[s] or contest[s]” within the
meaning of the Wire Act. We conclude that they do not. The ordinary
meaning of the phrase “sporting event or contest” does not encompass
lotteries. As noted above, a statute enacted the same day as the Wire Act
expressly distinguished sports betting from other forms of gambling,
including lotteries. See supra pp. 148 –149 (discussing section 1953(e)).
Other federal statutes regulating lotteries make the same distinction. See
We further note that the Wire Act itself uses the term “gambling information” in sec-
tion 1084(d). See 18 U.S.C. § 1084(d) (“When any common carrier, subject to the juris-
diction of the Federal Communications Commission, is notified in writing by a Federal,
State, or local law enforcement agency, acting within its jurisdiction, that any facility
furnished by it is being used or will be used for the purpose of transmitting or receiving
gambling information in interstate or foreign commerce in violation of Federal, State or
local law, it shall discontinue or refuse, the leasing, furnishing, or maintaining of such
facility, after reasonable notice to the subscriber[.]”) (emphasis added). We express no
opinion about the scope of that term as it is used in that statutory provision.
11 We also considered the possibility that, in the Wire Act’s reference to “any sporting
event or contest,” 18 U.S.C. § 1084(a), the word “sporting” modifies only “event” and not
“contest,” such that the provision would bar the wire transmission of “wagers on any
sporting event or [any] contest.” This interpretation would give independent meaning to
“event” and “contest,” but it would also create redundancy of its own. If Congress had
intended to cover any contest, it is unclear why it would have needed to mention sporting
events separately. Moreover, as discussed above, the legislative history of the Wire Act
makes clear that Congress was focused on preventing the use of wire communications for
sports gambling in particular. And, legislative proposals from the 1950s in which the
phrase “any sporting event or contest” originated further confirm that Congress intended
to reach only “sporting contests.” A key debate at that time concerned whether to regulate
“any sporting event or contest” or “any horse or dog racing event or contest.” See, e.g.,
S. Rep. No. 81-1752, at 3, 22, 28 (1950) (explaining committee amendment to bill
narrowing the definition of “gambling information” from covering “any sporting event or
contest” to “any horse or dog racing event or contest”); compare S. 3358, 81st Cong.
§ 2(b) (1950) (as introduced), with S. 3358, 81st Cong. § 2(b) (1950) (as reported by the
Interstate and Foreign Commerce Committee). If Congress had intended the Wire Act’s
predecessors to reach any “contest,” however, the debate over which adjectival phrase to
apply to “event” would have been meaningless.
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Whether the Wire Act Applies to Non-Sports Gambling
18 U.S.C. § 1307(d) (2006) (“‘Lottery’ does not include the placing or
accepting of bets or wagers on sporting events or contests.”).12 Nothing in
the materials supplied by the Criminal Division suggests that the New
York or Illinois lottery plans involve sports wagering, rather than garden-
variety lotteries. Accordingly, we conclude that the proposed lotteries are
not within the prohibitions of the Wire Act.
Given that the Wire Act does not reach interstate transmissions of wire
communications that do not relate to a “sporting event or contest,” and
that the state-run lotteries proposed by New York and Illinois do not
involve sporting events or contests, we conclude that the Wire Act does
not prohibit the lotteries described in these proposals. In light of that
conclusion, we need not consider how to reconcile the Wire Act with
UIGEA, because the Wire Act does not apply in this situation. Accord-
ingly, we express no view about the proper interpretation or scope of
UIGEA.
VIRGINIA A. SEITZ
Assistant Attorney General
Office of Legal Counsel
12 In addition, the Professional and Amateur Sports Protection Act (“PASPA”) prohib-
its a governmental entity from sponsoring, operating, or authorizing by law “a lottery,
sweepstakes, or other betting, gambling, or wagering scheme based, directly or indirectly
. . . on one or more competitive games in which amateur or professional athletes partici-
pate, or are intended to participate, or on one or more performances of such athletes in
such games.” 28 U.S.C. § 3702 (2006). While the statute grandfathers some established
state gambling schemes, a new state lottery falling within the Act’s prohibitions would
not be exempt. Id. § 3704; see, e.g., Office of the Comm’r of Baseball v. Markell, 579
F.3d 293, 300–04 (3d Cir. 2009) (PASPA preempted aspects of Delaware statute permit-
ting wagering on athletic contests, which were not saved by any of the statutory excep-
tions).
151