In 2018, the Supreme Court struck down a 1992 federal law that banned commercial sports betting in most states. That cleared the way for legalizing the roughly $150 billion in illegal sports bets Americans were making every year. The Federal government has designated some forms of gambling as prohibited within the US and has created laws that are non-negotiable in the regulation of such prohibited activities. On this subject, the Federal government may outlaw any form of gambling and states must abide by their law as Federal regulation will always trump state laws. Federal Wire Act And The Effect It Has On Internet Sports Gambling The Federal Wire Act was put into law in 1961 and is one of the biggest issues in the sports betting industry today. As the law was established in the 1960s, it is quite outdated, yet the US government still uses it to crack down on gambling establishments. If a lawsuit by sports organizations against a state for repealing an anti-gambling law strikes you as a little weird, it should. Nonetheless, a 1992 federal statute known as the Professional. In 2018, the Supreme Court struck down the PAPSA law that put limits on sports gambling, electing to give power to the states instead of the federal government.

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 betonline, 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 betonline 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.

Federal Law Regarding Sports Gambling Rules

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 betonline 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.

The Professional and Amateur Sports Protection Act of 1992 (Pub.L.102–559), also known as PASPA or the Bradley Act, is a judicially-overturned law that was meant to define the legal status of sports betting throughout the United States. This act effectively outlawed sports betting nationwide, excluding a few states.

The sports lotteries conducted in Oregon, Delaware, and Montana were exempt, as well as the licensed sports pools in Nevada^[1]. In addition, Congress provided a one-year window of opportunity from the effective date of PASPA (January 1, 1993) for states which operated licensed casino gaming for the previous ten-year period to pass laws permitting sports wagering. The latter exception was clearly crafted with New Jersey in mind. However, New Jersey failed to take advantage of this opportunity. Excluded from the reach of PASPA are jai alai, as well as parimutuelhorse and dog racing.

Federal Law Regarding Sports Gambling Losses

In a May 2018 decision in Murphy v. National Collegiate Athletic Association, the Supreme Court of the United States ruled that PASPA conflicts with the Tenth Amendment.

History[edit]

On June 26, 1991, the Senate Judiciary Subcommittee on Patents, Copyrights and Trademarks held public hearings on sports gambling. It found '(s)ports gambling is a national problem. The harms it inflicts are felt beyond the borders of those States that sanction it.' David Stern, the then-commissioner for the National Basketball Association, testified that 'The interstate ramifications of sports betting are a compelling reason for federal legislation.' In light of these findings, Congress exercised its authority under the Commerce Clause to enact Senate Bill 474 Professional and Amateur Sports Protection Act (PASPA) in 1992, codified at 28 U.S.C. § 3701.^[2]

Legislative efforts against the act[edit]

New Jersey has been a leader, both in legislation and in the legal process, in support of the legalization of sports betting in New Jersey despite its original failure to take advantage of the carve out in the PASPA of 1992. The law is also known as the 'Bradley Act', named for New Jersey Senator and former NBA star Bill Bradley. New Jersey voters in 2011 voted for a state constitutional amendment that would permit sports gambling. The next year, the NJ State Legislature enacted the Sports Wagering Act ('2012 Act'), allowing sports wagering at New Jersey casinos and racetracks.^[3]

Legal challenges[edit]

Proponents of repeal typically assert that the law as written is inherently unconstitutional, as the Tenth Amendment of the U.S. Constitution reserves to the states all rights not explicitly granted to the federal government—such as gambling regulation. While the primarily legal challenge to the law came from New Jersey, other efforts to overturn it had been set in motion before the Supreme Court's decision in May 2018; this included a sports-betting bill being introduced in Kentucky^[4], as well as the other states who are in the process of creating and or passing some form of sports betting legislation and the formation of the pro-repeal American Sports Betting Coalition, a lobby alliance which includes the American Gaming Association and the National Indian Gaming Association.^[5]

PASPA was formally challenged in the state of New Jersey. In March 2009, New Jersey State Senator Raymond Lesniak filed a lawsuit in the United States District Court for the District of New Jersey claiming, among other things, that the PASPA unconstitutionally discriminated among the states by allowing four states to offer sports betting while disallowing the other forty-six states from enjoying the privilege; however the case was dismissed as the court argued that only then-Governor Chris Christie could bring the suit, and at that time, Christie believed it would be difficult to challenge the law.^[6] A 2010 referendum showed overwhelming support by state voters to legalize sports gambling,^[7] and by 2012, the state passed a law that would allow for sports gambling at licensed locations.^[8] This law was challenged by the National Collegiate Athletic Association, the National Basketball Association, the National Football League, the National Hockey League, and Major League Baseball in August 2012, arguing their new law violated PASPA.^[9] The state argued that they knew their law likely violated PASPA, but argued that PASPA itself violated the Tenth Amendment's protection against anti-commandeering federal laws that stripped the power of the state to repeal their own sports gambling ban.^[10] This case, heard in the United States District Court for the District of New Jersey, found for the sports leagues, dismissing the state's claims regarding PASPA.^[11] New Jersey appealed the decision. On September 17, 2013, the Third Circuit Court of Appeals, in a decision by Judge Julio M. Fuentes, found for the sports leagues, again ruling that the state law violated PASPA and enjoined the state from enacting the law.^[12] However, the Appeals Court also ruled that PASPA did not prevent New Jersey from repealing any existing laws it had.^[13]

Based on the Appeal Court's comment, New Jersey, now with Governor Christie's blessing, passed a new law in 2014 that repealed a former state law that banned sports gambling.^[13] The four leagues and the NCAA filed suite against this new law, again arguing that it violated PASPA. The leagues and the NCAA prevailed both at District Court and at an en banc decisions from the Third Circuit by August 2016, leading the state to petition the Supreme Court of the United States to hear the case.^[14] New Jersey appealed this case to the United States Supreme Court, requesting examination of PASPA under the anti-commandeering provisions of the Tenth Amendment.^[15]

The Supreme Court accepted the case in June 2017^[16] and heard oral arguments in December 2017;^[17] during this time, Governor Christie stepped down and was replaced by Phil Murphy; the case before the court became Murphy v. National Collegiate Athletic Association. The case was combined with a separate petition NJ Thoroughbred Horsemen v. NCAA, representing commercial interests related to PASPA. The Court ruled in May 2018 in a 7-2 decision that parts of PASPA were unconstitutional as they commandeered power from the states, and in a 6-3 decision, determined that the whole of PASPA was unconstitutional.^[18][19]

References[edit]

1. ^Lambert, Troy (July 18, 2017). 'Supreme Gamble: The Professional and Amateur Sports Protection Act'. Huffington Post.
2. ^Rodefer, Jeffrey (March 5, 2007). 'Sports Protection Act'. gambling-law-us.com. Retrieved July 24, 2017.
3. ^Johnson, Brent (October 17, 2014). 'Christie signs law allowing sports betting in N.J.'The Star-Ledger. Retrieved July 24, 2017.
4. ^'New Kentucky Bill Would Legalize Sports Betting In Bluegrass State'. Legal Sports Report. September 20, 2017. Retrieved October 24, 2017.
5. ^'Tribal, Commercial Casino Alliance On Sports Betting Gains Momentum'. Legal Sports Report. September 25, 2017. Retrieved October 24, 2017.
6. ^Spoto, MaryAnn (September 25, 2011). 'Casino, horse racing leaders push for legalization of sports betting in N.J.'The Star-Ledger. Retrieved March 16, 2018.
7. ^Spoto, MaryAnn (November 8, 2011). 'Sports betting backed by N.J. voters'. The Star-Ledger. Retrieved March 16, 2018.
8. ^Friedman, Matt (January 17, 2012). 'Gov. Christie signs bill allowing gamblers to place bets on pro, college sports teams'. The Star-Ledger. Retrieved March 16, 2018.
9. ^Heitner, Darren (August 7, 2012). 'Constitutionality Of Sports Betting Prohibition At Issue In NCAA And Professional Leagues' Lawsuit Against New Jersey'. Forbes. Retrieved July 24, 2017.
10. ^Schamis, Axel; Van Bramer, Katherine. 'Christie v. National Collegiate Athletic Association'. Legal Information Institute. Retrieved March 18, 2018.
11. ^Drape, Joe (March 27, 2013). 'Cash-Hungry States Eye Sports Betting, to Leagues' Dismay'. The New York Times. Retrieved July 24, 2017.
12. ^'Appeals Court Upholds Constitutionality Of New Jersey Sports Betting Ban'. United States Department of Justice. September 17, 2013. Retrieved July 24, 2017.
13. ^ ^abPurdum, David; Rodenberg, Ryan (March 3, 2018). 'The odds of legalized sports betting: New Jersey vs. the leagues'. ESPN. Retrieved March 16, 2018.
14. ^Johnson, Brent; Salant, Jonathan (August 9, 2016). 'N.J. loses again in quest to bring sports betting to state'. The Star-Ledger. Retrieved July 23, 2017.
15. ^'Christie v. National Collegiate Athletic Association'. SCOTUSblog. Retrieved July 26, 2017.
16. ^Johnson, Brent; Salant, Jonathan (June 28, 2017). 'U.S. Supreme Court agrees to hear N.J. sports betting case'. The Star-Ledger. Retrieved July 22, 2017.
17. ^'The NJ Sports Betting Case Gets Its Day In SCOTUS: What We Learned'. Legal Sports Report. December 4, 2017. Retrieved December 5, 2017.
18. ^Purdum, David (May 14, 2018). 'Supreme Court strikes down sports betting law'. ESPN. Retrieved May 14, 2018.
19. ^Maese, Rick (May 14, 2018). 'Analysis What the Supreme Court's sports gambling decision means'. The Washington Post. ISSN0190-8286. Retrieved May 14, 2018.

External links[edit]

• Opinion for Murphy v. National Collegiate Athletic Assn. (16-476) from SupremeCourt.gov
• Professional and Amateur Sports Protection Act of 1992, Chuck Humphrey, Gambling Law US

Federal Law Regarding Sports Gambling Winnings