You Might Be Breaking Federal Gambling Law With Your Sports Betting

Posted on May 20, 2020

If you’ve ever used Venmo to send your friend in New Jersey some cash to wager on a sporting event, you might be in violation of federal gambling law. Whether you were aware of that illegality at the time is irrelevant.

A recent study shows that many respondents who live in a state without legal online sports betting resort to these means. Here are the details of the situation and how to avoid the violation.

What is the federal gambling law that New Yorkers should know?

In 1961, the United States government enacted the Interstate Wire Act, which is also known as the Federal Wire Act. The aim of the law was to make certain types of gambling illegal.

In January of 2019, the US Department of Justice modified its interpretation of the act. In its opinion, any form of online gambling across state lines is illegal in terms of the federal government’s view.

While states are free to legalize and regulate online gambling within their borders, the federal government takes jurisdiction when activity crosses state lines. That includes electronically transmitting funds used for gambling.

So that $50 you sent to your friend to put down on Super Bowl LV futures may have been a violation of federal law. That is provided the DOJ ever prosecutes.

It’s unlikely the DOJ will dedicate resources to tracking this behavior anytime soon. However, it’s still a chance you’re taking. There are other options for New Yorkers.

How to legally bet on sports without violating the Wire Act

If you aren’t stuck on doing your betting online, you can place a wager at any of New York’s licensed brick-and-mortar sportsbooks. Doing so is completely legal in terms of both federal and state law.

If you’d rather place your bet online, however, you do have some options. You can travel to New Jersey or Pennsylvania. In both of those states, online wagering is legal.

You don’t have to be a resident of either state to place a bet there. If you’re at least 21 years of age and physically located in either state at the time you make your wager, you’re good to go.

The obvious ultimate in convenience, however, would be placing a legal bet online without leaving the state. There is some movement toward that end.

What’s the holdup on legal online betting in NY?

Some officials in Albany, like Gov. Andrew Cuomo, believe that legalizing mobile betting in NY requires an amendment to the state’s constitution. So far, that contingent has managed to stymie any attempts to legalize it through other means.

Amending the state’s constitution is an intentionally arduous process, however. It would take years even if ultimately successful. To date, lawmakers haven’t started the process.

That’s where New Yorkers who wish to bet online legally in their own state can play a part. If enough of them apply pressure to Cuomo and their representatives in Albany, it should motivate them to move on the issue.

Until such a time, however, this is the status quo. Transmitting funds for gambling across state lines electronically puts people at risk of violating federal gambling law.

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Derek Helling

Derek Helling is a freelance journalist who resides in Kansas City, Mo. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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