Through the wire
The series of US criminal prosecutions of online gaming companies during the last three years can be seen as the inevitable result of the wishful thinking surrounding two widely-held misperceptions about the reach of US laws. The first of these was the belief that US anti-gambling laws applied only to persons who were physically present within US borders. The second was the expectation that US prosecutors could not bring prosecutions against online gaming operators because for a period of years they had not. Both of these misperceptions have been unambiguously resolved by the recent actions of the US Department of Justice (DoJ). Two further questions about the reach of US laws have proven more stubborn, though. The first lingering question relates to the scope of the Wire Act, the federal statute that makes it illegal to engage "in the business of betting or wagering... on any sporting event or contest" using wire communications. The DoJ has consistently taken the view that the Wire Act applies broadly to betting or wagering on all forms of gambling, including sports betting and poker. By contrast, in In Re MasterCard International , the only US appellate court that has considered the scope of the Wire Act held that the statute is narrowly drawn and applies only to sports betting. This difference of opinion remains important particularly because the DoJ interprets the Wire Act to apply to any gambling business engaged in "betting or wagering" using wire communications. If the contrary view - that the Wire Act applies only to sports betting - is correct, then illegal gambling includes only a more narrow group of activities that are defined to be illegal under the laws of individual states.
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