Whether Proposals by Illinois and New York to Use the Internet and Out-of-State Transaction Processors to Sell Lottery Tickets to In-State Adults Violate the Wire Act

WHETHER PROPOSALS BY ILLINOIS AND NEW YORK TO USE THE
INTERNET AND OUT-OF-STATE TRANSACTION PROCESSORS TO SELL
LOTTERY TICKETS TO IN-STATE ADULTS VIOLATE THE WIRE ACT
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 Counsel, 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 Internet 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 interpreted,
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
transmitting 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,
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”).
Opinions of the Office of Legal Counsel in Volume 35
the Wire Act does not, in our view, prohibit 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 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 communications related to non-sports wagering,
and that their proposed lotteries 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 Internet 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 communication originates and terminates in the same state, the law’s interstate
commerce 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
terminate 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, “unlawful Internet gambling” means “to place, receive,
or otherwise knowingly 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
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Whether Use of the Internet and Out-of-State Processors to Sell Lottery Tickets Violates the Wire Act
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 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 criminalize 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 transaction 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
“intermediate 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 provide 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 lottery proposals
may be unlawful rests on the premise that the Wire Act prohibits interstate wire transmissions of
gambling-related communications 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 transmissions 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 Gambling 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 Recommendation 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
2
State-run lotteries are exempt from many federal anti-gambling prohibitions. See, e.g., 18 U.S.C.
§§ 1307, 1953(b)(4) (2006).
3
A New York court also found that subsection 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).
3
Opinions of the Office of Legal Counsel in Volume 35
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, subsection 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 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,
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
This provision contains two broad clauses. The first bars anyone engaged 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
4
The Wire Act defines “wire communication facility” as “any and all instrumentalities, 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).
5
The Criminal Division reads this second clause of subsection 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 communication 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 subsection 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
subsection 1084(a), which prohibits using wire communications for “the transmission . . . of . . . information
assisting 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 subsection 1084(a) is better read as a single prohibition barring
“the transmission of a wire communication 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 subsection 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 information 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
4
Whether Use of the Internet and Out-of-State Processors to Sell Lottery Tickets Violates the Wire Act
Our question is whether the term “on any sporting event or contest” modifies each
instance of “bets or wagers” in subsection 1084(a) or only the 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 “information
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 sporting 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
subsection 1084(a)’s first clause as modifying both “the transmission in interstate or foreign
commerce of bets or wagers” and “information assisting in the placing of bets or wagers,” rather
than as modifying 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
proposed reading that much more certain. See 18 U.S.C. § 1084(a) (“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 . . . .”).
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 transmission 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 transmission 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
money or credit as a result of a bet or wager or for information assisting in the placing of bets or wagers”), reprinted
in 1961 U.S.C.C.A.N. 2631, 2632.
5
Opinions of the Office of Legal Counsel in Volume 35
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 subsection 1084(a) supports this conclusion. As originally
proposed, subsection 1084(a) would have imposed criminal penalties on anyone who “leases,
furnishes, or maintains any wire communication 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 subsection 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 Committee 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:
The second amendment changes the language of the bill, as introduced (which
prohibited the leasing, furnishing, or maintaining of wire communication facility
with intent that it be used for the transmission in interstate or foreign commerce
of bets or wagers), to prohibit 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 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 (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 subsection 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 transmission 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 Transmission 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) (“Senate
Judiciary Comm. Exec. Session”) (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
6
Whether Use of the Internet and Out-of-State Processors to Sell Lottery Tickets Violates the Wire Act
transmission of bets or wagers in connection with a sporting event”). 6 Given that such changes
would have 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 contest” modifies
subsection 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 wagers 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 consistent 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 intended 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 communication facilities which are or will be used for
the transmission of bets or wagers and gambling information in interstate and foreign
commerce.”) (emphasis added), reprinted in 1961 U.S.C.C.A.N. at 2631. This omission suggests
that Congress used shortened phrases in the second clause to refer back to terms spelled out more
completely 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. Corley 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 subsection 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
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. 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; Senate Judiciary Comm. Exec. Session at 54-
55 (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”).
7
Opinions of the Office of Legal Counsel in Volume 35
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 entitles
the sender to money or credit for sharing information that assisted in the placing of a sports-
related bet.
Reading subsection 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 patchwork of prohibitions. If the provision’s second
clause is read to apply to all bets or wagers, subsection 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 communications 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 subsection 1084(a) supports our reading of the text. Cf. Pub.
Citizen v. U.S. 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 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., concurring) (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 legislative 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 transmission 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, explains:
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Whether Use of the Internet and Out-of-State Processors to Sell Lottery Tickets Violates the Wire Act
Testimony before your Committee on the Judiciary revealed that modern
bookmaking depends in large measure on the rapid transmission of gambling
information by wire communication facilities. For example, at present, the
immediate receipt of information as to results 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 information almost to
the very minute that a particular sporting event begins.
H.R. Rep. No. 87-967 at 2, reprinted in 1961 U.S.C.C.A.N. at 2631-32 (reprinted report entitled
“Sporting Events—Transmission of Bets, Wagers, and Related Information”); see also 107
Cong. Rec. 16,533 (1961) (statement of Rep. Celler, Chairman, H. Judiciary Comm.) (“This
particular bill involves the transmission of wagers or bets and layoffs on horseracing and other
sporting events.”); House Hearings 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 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 Communications, 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 available. Illegal
bookmaking depends upon races at about 20 major racetracks 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, information 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 customers.
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 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.”).
9
Opinions of the Office of Legal Counsel in Volume 35
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 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 at 6 (statement of Robert F.
Kennedy, Att’y Gen.); see also House Hearings 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 installations 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 at 277-78 (testimony of Herbert Miller, Assistant Attorney
General, Criminal Division). 7
Our conclusion that subsection 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
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 telephone is
indispensable to is wagers on a sporting event or contest. Now, as a practical matter, your
numbers game does not require the utilization of communications facilities.
....
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 at 277-78.
10
Whether Use of the Internet and Out-of-State Processors to Sell Lottery Tickets Violates the Wire Act
gambling, including gambling known as the “numbers racket,” which involved lottery-
style games. In addressing these forms of gambling, Congress used terms wholly
different from those employed in the Wire Act. For example, the Interstate
Transportation 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 exemptions, the statute provides, in part:
Whoever, except a common carrier in the usual course of its business, 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 respect to a sporting event; or (c) in a numbers, policy, bolita, or
similar 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) of this provision was intended to cover
lotteries. See H.R. Rep. No. 87-968, at 2 (1961), reprinted in 1961 U.S.C.C.A.N. 2634, 2635;
see also House Hearings at 29-30 (1961) (statement of Robert F. Kennedy, Att’y Gen.)
(highlighting the need for legislation prohibiting the interstate transportation of wagering
paraphernalia 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 Congress’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
8
As Assistant Attorney General Herbert Miller explained, “numbers, policy, and bolita[] are similar types
of lotteries wherein an individual purchases a ticket with a number.” House Hearings at 350; see generally National
Institute of Law Enforcement and Criminal Justice, United States Department of Justice, The Development of the
Law of Gambling: 1776-1976, at 748-52 (1977) (describing the numbers game and lotteries).
9
The Supreme Court later held that 18 U.S.C. § 1953 barred the interstate transportation 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, § 3, 88 Stat. 1916 (1975) (codified at 18 U.S.C. § 1953(b)(4)), and established a new
provision, 18 U.S.C. § 1307, exempting state-conducted lotteries from statutory restrictions governing lotteries in
18 U.S.C. §§ 1301-1304, Pub. L. No. 93-583, § 1, 88 Stat. 1916 (1975). 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 “gambling 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
11
Opinions of the Office of Legal Counsel in Volume 35
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. 10-11 (discussing § 1953(e)). Other federal statutes regulating lotteries make the same
distinction. See 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
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 subsection 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 subsection 1084(b) does not
refer to “gambling information”), reprinted in 1961 U.S.C.C.A.N. at 2632; House Hearings at 353-54 (referring,
in discussing H.R. 7039, 87th Cong. (1961), to “[o]ur purpose [being] to prohibit the interstate 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”).
We further note that the Wire Act itself uses the term “gambling information” in subsection 1084(d).
See 18 U.S.C. § 1084(d) (“When any common carrier, subject to the jurisdiction 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.
12
In addition, the Professional and Amateur Sports Protection Act (“PASPA”) prohibits 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
12
Whether Use of the Internet and Out-of-State Processors to Sell Lottery Tickets Violates the Wire Act
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. Accordingly, we express no view about the proper interpretation or scope of
UIGEA.
/s/
VIRGINIA A. SEITZ
Assistant Attorney General
professional athletes participate, 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., OFC Comm
Baseball v. Markell, 579 F.3d 293, 300-04 (3d Cir. 2009) (PASPA preempted aspects of Delaware statute permitting
wagering on athletic contests, which were not saved by any of the statutory exceptions).
13