The Federal Wire Act of 1961, passed with the support of Attorney General Robert F. Kennedy, was aimed at illegal horse race bookies and bettors on sports events. The law prescribed penalties of up to two years prison time and $10,000 fines for persons who “knowingly” use “a wire communication facility for transmission” of bets, wagers, and information assisting betting and wagering on any sports event or contest. Telephone companies could be ordered to cut off service from betting customers when notified of the activity by law enforcement agencies.
Legitimate reporting on sports events by newspaper media was exempt from the act. Similarly it was permissible to transmit messages for betting from one state to another as long as the betting activity was legal in both the states.
The Federal Wire Act was written at a time when telephones with physical wire lines represented the major avenue for interstate communication. Also, horse-race betting was the most prevalent form of illegal gambling. Attorney General Kennedy’s testimony to Congress on the bill mentioned only sports and race betting. Since 1961, telephones have used wireless signals, and there are also other forms of satellite communication signals. The Internet is replacing the telephone for many communicators. Moreover, the Internet carries many kinds of wagering activity in addition to bets on races and sports events. The imprecise fit of the act to current gaming forms has necessitated discussion regarding new legislation to clarify the application of the law. A bill sponsored by Senator Jon Kyle of Arizona won approval in the U. S. Senate but had not come to a floor vote in the House of Representatives as of the end of the 2000 session. That bill would make all gambling on the Internet illegal. Amendments were added to make exceptions for legal race betting and lottery organizations. The bill would give the Department of Justice and the Federal Trade Commission power to enforce the law.
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