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Wire Act of 1961, codified at 18 U.S.C. §1084.</ref>
Commentators most often mention the Wire Act when discussing federal criminal laws that outlaw Internet gambling in one form or another. Early federal prosecutions of Internet gambling generally charged violations of the Wire Act. In fact, perhaps the most widely known of federal Internet gambling prosecutions, United States v. Cohen,  involved the conviction, upheld on appeal, of the operator of an offshore, online sports book under the Wire Act.
In general terms, the Act outlaws the use of interstate telephone facilities by those in the gambling business to transmit bets or gambling-related information. Offenders are subject to imprisonment for not more than two years and/or a fine of the greater of not more than twice the gain or loss associated with the offense or $250,000 (not more than $500,000 for organizations). They may also have their telephone service canceled at law enforcement request, and a violation of section 1084 may help provide the basis for a prosecution under 18 U.S.C. §§1952 (Travel Act), 1955 (illegal gambling business), 1956 and 1957 (money laundering), and/or 1961-63 (RICO).
Elements of the Wire Act Edit
The elements of the Wire Act extend to anyone who:
- being engaged in the business of betting or wagering
- uses a wire communication facility
- A. for the transmission in interstate or foreign commerce
- 1. of bets or wagers or
- 2. information assisting in the placing of bets or wagers on any sporting event or contest, or
- B. for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or
- C. for information assisting in the placing of bets or wagers. . . .
As a general matter, the Wire Act has been more sparingly used than some of the other federal gambling statutes, and as a consequence it lacks some of interpretative benefits which a more extensive case law might bring.
Engaged in the Business of Betting or Wagering Edit
The Act is addressed to those “engaged in the business of betting or wagering” and therefore apparently cannot be used to prosecute simple bettors.
The government must prove that the defendant was aware of the fact he was using a wire facility to transmit a bet or gambling-related information; it need not prove that he knew that such use was unlawful. The courts have also rejected the contention that the prohibition applies only to those who transmit, concluding that “use for transmission” embraces both those who send and those who receive the transmission.
Interstate Transmission Edit
Grammatically, interstate transmission appears as a feature of only half of the elements (compare, “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,” (4.A.1 & 2. above), with, “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,” (4.B. & C. above). Nevertheless, virtually every court to consider the question has concluded that a knowing, interstate or foreign transmission is an indispensable element of any Section 1084 prosecution.
Transmission of a Wire Communication Edit
The phrase “transmission of a wire communication” is somewhat ambiguous as it applies to the Internet. Depending on how the phrase is interpreted, the act might not apply to Internet gambling in some instances — for example, when information is only received over the Internet. Some courts have held that “transmission” means receiving as well as sending information, while others have held that it means only sending.
Gambling on Sporting Events Edit
The execution of a similar interpretative exercise might lead to the conclusion that the section applies only to cases involving gambling on sporting events (compare 4.A.1 & 2. with 4.B. & C. again). The vast majority of prosecutions involve sports gambling, but cases involving other forms of gambling under Section 1084 are not unknown.
There is a split of authority on whether the Wire Act applies only to sports gambling. In 2011, the Department of Justice issued an opinion that "[i]nterstate transmissions of wire communications that do not relate to a 'sporting event or contest' fall outside the reach of the Wire Act."
Construction of the Act is further complicated by the defense available under Section 1084(b):
|“||Nothing in this section shall be construed to prevent the transmission in interstate or foreign commerce of information for use in news reporting of sporting events or contests, or for the transmission of information assisting in the placing of bets or wagers on a sporting event or contest from a State or foreign country where betting on that sporting event or contest is legal into a State or foreign country in which such betting is legal.||”|
Certain courts have stated that this language means that when the betting activity is legal in both jurisdictions, interstate gambling would not be a violation of the Wire Act. Most courts, however, have disagreed with this interpretation of Section 1084(b). For example, in an Internet gambling case, the Southern District of New York highlighted its more restrictive scope:
|“||the §1084(b) exemption by its terms applies only to the transmission of information assisting in the placing of bets, not to the other acts prohibited in §1084(a), i.e., transmission of (1) bets or wages or (2) wire communications entitling the recipient to money or credit as a result of bets or wagers. With regard to transmissions of information assisting in the placing of bets, the exemption is further narrowed by its requirement that the betting at issue be legal in both jurisdictions in which the transmission occurs. No exemption applies to the other wire communications proscribed in Section 1084(a), even if the betting at issue is legal in both jurisdictions. See United States v. McDonough, 835 F.2d 1103, 1105 (5th Cir. 1988).||”|
In other words, transmitting information to assist in placing bets on a certain event is legal if two conditions are met: (1) betting on the event is legal in both the place where the transmission originates and the place where it is received, and (2) the transmission is limited to information that assists in the placing of bets — that is, it does not include the bets themselves.
Accomplice Liability Edit
An accomplice who aids and abets another in the commission of a federal crime may be treated as if he had committed the crime himself. The classic definition from Nye & Nissen v. United States explains that liability for aiding and abetting attaches when one “in some sort associates himself with the venture, participates in it as in something that he wishes to bring about, [and] seeks by his action to make it succeed.” The Department of Justice advised the National Association of Broadcasters that its members risked prosecution for aiding and abetting when they provided advertising for the online gambling operations.
Conspirator Liability Edit
In addition to such accomplice liability, a conspirator who contrives with another for the commission of a federal crime is likewise liable for the underlying crime and for any additional, foreseeable offense committed by a confederate in furtherance of the common scheme.
- ↑ Bruce P. Keller, The Game’s the Same: Why Gambling in Cyberspace Violates Federal Law, 108 Yale L.J. 1569, 1580 (1999) (“It is the breadth of the Wire Wager Act that has attracted the most attention in the Internet gambling context because notwithstanding the possible applicability of other federal laws, it directly prohibits the use of a wire transmission facility to foster a gambling business”); Jonathan Gottfried, The Federal Framework for Internet Gambling, 10 Richmond J. of L. & Tech. 26, 46 (2004) (“the Wire Act . . . is the federal act most often applied in efforts to prosecute Internet gambling. . . .”); Michael P. Kailus, Note, Do Not Bet on Unilateral Prohibition of Internet Gambling to Eliminate Cyber-Casinos, 1999 Univ. of Ill. L. Rev. 1045, 1057; Scott M. Montpas, Gambling On-Line: For a Hundred Dollars, I Bet You Government Regulation Will Not Stop the Newest Form of Gambling, 22 Univ. of Dayton L. Rev. 163, 180 (1996); Harley J. Goldstein, On-Line Gambling: Down to the Wire?, 8 Marq. Sports L.J. 1, 18 (1997); General Accounting Office, Internet Gambling: An Overview of the Issues 11 (Dec. 2002).
- ↑ United States v. Ross, 1999 WL 782749 (S.D.N.Y. Sept. 16, 1999) (denying a motion to dismiss a four count indictment charging violations of 18 U.S.C. §1084 and 18 U.S.C. §371 (conspiracy) in connection with Internet gambling business operated out of Curacao in the Netherlands Antilles); see also People v. World Interactive Gaming Corp., 1999 WL 591995 (N.Y. Sup. Ct. July 22, 1999) (noting in dicta violations of the Wire Act in connection with an offshore Internet casino that accepted wagers from bettors in New York); cf. United States v. D’Ambrosia, 313 F.3d 987, 987-89 (7th Cir. 2002) (resolution of sentencing issues associated with Wire Act conviction of the operators “of an offshore internet-based sports bookmaking operation”); United States v. Tedder, 2003 WL 23204848 (W.D. Wis. Aug. 22, 2003) (construction of 18 U.S.C. §1084 involving the same parties and circumstances as D’Ambrosia).
- ↑ 260 F.3d 68 (2d Cir. 2001).
- ↑ 18 U.S.C. §§1084(a), 3571(b),(d).
- ↑ Id. §1084(d).
- ↑ 18 U.S.C. §1084(a).
- ↑ United States v. Scavo, 593 F.2d 837, 843 (8th Cir. 1979) (“If an individual performs only an occasional or nonessential service or is a mere bettor or customer, he cannot properly be said to engage in the business”); see also Rewis v. United States, 401 U.S. 808, 810-11 (1971) (noting that the absence of a congressional intent to include “mere bettors” among those who, by operation of 18 U.S.C. §2, might be convicted of aiding or abetting a violation of the Travel Act, 18 U.S.C. §1952 (relating to interstate travel to carry on a gambling business, inter alia). But see United States v. Southard, 700 F.2d 1, 20 n.24 (1st Cir. 1983) (“The district court held that the statute did not prohibit the activities of ‘mere bettors.’ We take no position on this ruling except to point out that the legislative history is ambiguous on this point at best”).
- ↑ United States v. Blair, 54 F.3d 639, 642-43 (10th Cir. 1995); United States v. Ross, 1999 WL 7832749, at 8-9 (S.D.N.Y. Sept. 16, 1999); cf. United States v. Cohen, 260 F.3d 68, 71-73 (2d Cir. 2001) (conviction for conspiracy to engage in conduct in violation the Wire Act does not require proof that the defendant knew that the conduct was unlawful). Contra Cohen v. United States, 378 F.2d 751, 756-57 (9th Cir. 1967).
- ↑ United States v. Pezzino, 535 F.2d 483, 484 (9th Cir. 1976). United States v. Sellers, 483 F.2d 37, 44-45 (5th Cir. 1973); United States v. Tomeo, 459 F.2d 445, 447 (10th Cir. 1972); Sagansky v. United States, 358 F.2d 195, 200 (1st Cir. 1966). Contra United States v. Stonehouse, 452 F.2d 455 (7th Cir. 1971).
- ↑ United States v. Southard, 700 F.2d 1, 24 (1st Cir. 1983), citing inter alia Sagansky v. United States, 358 F.2d 195, 199 n.4 (1st Cir. 1966); United States v. Barone, 467 F.2d 247, 249 (2d Cir. 1972); Cohen v. United States, 378 F.2d 751, 754 (9th Cir. 1967). Contra United States v. Swank, 441 F.2d 264, 265 (9th Cir. 1971).
- ↑ United States v. Reeder, 614 F.2d 1179 (8th Cir. 1980); United States v. Stonehouse, 452 F.2d 455 (7th Cir. 1971); Telephone News Sys. v. Illinois Bell Tel. Co, 220 F. Supp. 621 (N.D. Ill. 1963), aff’d, 376 U.S. 782 (1964).
- ↑ See, e.g., AT&T Corp. v. Coeur d’Alene Tribe, 45 F.Supp.2d 995 (D. Idaho 1998) (lottery); United States v. Smith, 390 F.2d 420, 421 (4th Cir. 1968); United States v. Chase, 372 F.2d 453, 457 (4th Cir. 1967). Smith and Chase both involved “numbers” and seem to have arisen under the same facts. None of these cases specifically reject, or even mention, a “sporting event” limitation.
- ↑ In re MasterCard International Inc., 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, 262 (5th Cir. 2002) (“The district court concluded that the Wire Act concerns gambling on sporting events or contests and that the [RICO] plaintiffs had failed to allege that they had engaged in internet sports gambling. We agree. . .”). See also United States v. Cohen, 260 F.3d 68 (2d Cir. 2001), cert. denied, 536 U.S. 922 (2002). Contra United States v. Lombardo, 639 F.Supp.2d 1271, 1281 (D. Utah. 2007); New York v. World Interactive Gaming Corp., 714 N.Y.S.2d 844, 847, 851-52 (N.Y. Sup. Ct. 1999) (subsection 1084(a) applied to gambling in the form of “virtual slots, blackjack, or roulette.”).
- ↑ 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.
- ↑ United States v. Kaczowski, 114 F. Supp. 2d 143, 153 (W.D. N. Y. 2000); Missouri v. Coeur D’Alene Tribe. 164 F.3d 1102, 1109 n.5 (8th Cir. 1999), cert. denied, 527 U.S. 1039 (1999).
- ↑ United States v. Ross, 1999 WL 782749 (S.D.N.Y. Sept. 16, 1999).
- ↑ United States v. Cohen, 260 F.3d 68, 73 (2d Cir. 2001) (“Cohen appeals the district court for instructing the jury to disregard the safe harbor provision contained in §1084(b). That subsection provides a safe harbor for transmissions that occur under both of the following two conditions: (1) betting is legal in both the place of origin and the destination of the transmission; and (2) the transmission is limited to mere information that assists in the placing of bets, as opposed to including the bets themselves”), cert. denied, 122 S. Ct. 2587 (2002); United States v. Ross, 1999 WL 782749 (S.D.N.Y. 1999).
- ↑ “Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.” 18 U.S.C. §2(a).
- ↑ 336 U.S. 613, 619 (1949).
- ↑ United States v. Frampton, 382 F.3d 213, 223 (2d Cir. 2004); United States v. Delgado-Uribe, 363 F.3d 1077, 1084 (10th Cir. 2004).
- ↑ Advertising for Internet Gambling and Offshore Sportsbook Operations, Letter from United States Deputy Attorney General John G. Malcolm to the National Association of Broadcasters dated June 11, 2003, filed as Exhibit A with the complaint in Casino City, Inc. v. United States Department of Justice, Civil Action No. 04-557-B-M3 (M.D. La.). In other related developments, U.S. marshals are reported to have seized $3.2 million that Discovery Communications had accepted for ads from Tropical Paradise, a Web casino operation based in Costa Rica (The Wall Street Journal — Europe, at A5 (Aug. 2, 2004)), and the federal prosecutors apparently warned PayPal, a money transfer service, that it risked prosecution under 18 U.S.C. §1960 (transmission of funds intended to be used to promote or support unlawful activity) by providing services to online gambling operations. See American Banker, Apr. 2, 2003), at 1.
- ↑ Pinkerton v. United States, 328 U.S. 640, 645-48 (1946); Salinas v. United States, 522 U.S. 52, 62-63 (1997) (“The partners in the criminal plan must agree to pursue the same criminal objective and may divide up the work, yet each is responsible for the acts of each other”). The conspiratorial agreement is itself a separate crime under 18 U.S.C. §371 (“If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both. If, however, the offense, the commission of which is the object of the conspiracy, is a misdemeanor only, the punishment for such conspiracy shall not exceed the maximum punishment provided for such misdemeanor”); United States v. Bruno, 383 F.3d 65, 89 (2d Cir. 2004); United States v. Hanhardt, 361 F.3d 382, 392 (7th Cir. 2004).