Betting history 101: The story behind the 1961 Wire Act (notes)

Last month’s Dept. of Justice memo which appeared to open the door wide to most forms of Internet gambling has, in just a few paragraphs, changed the online landscape. In Vegas, corporate types are ripping up three-month projections and plans.

Get ready for the Wild Wild West.

The DoJ’s decision to call off the dogs on Internet gambling was basically an admission that it could no longer effectively fold a newspaper in the middle of a hurricane. Many state and federal lawmakers had come to the same conclusion that gamblers and anyone with a third of a brain had long ago reached – that people were going to gamble whether or not lawyers in the U.S. government thought it was a good idea.

In state legislatures, Congress and courtrooms, the tide was turning. Even conservatives, so instrumental in passing anti-gambling legislation, were starting to smell the coffee.

Robert Kennedy wasn’t interested in stopping you from betting your Uncle Joe a fin on the Giants-Colts game or even cleaning out the guys who ripped off the Vegas count rooms and sent suitcases of cash back to bosses in Chicago and Kansas City. He wanted to 9×12-foot accommodations for the real-life Goodfellas – the Giancanas, Lucianos and Castellanos – the guys who more and more were controlling the streets of urban America. To RFK, gambling wasn’t the problem. He wanted to set giant rat traps for the creeps who controlled the business.

With RFK pushing the buttons and JFK backing it, the Wire Act passed Congress and was signed into law, less than a year into the Kennedy’s abbreviated presidency.

David Schwartz, a University of Nevada-Las Vegas professor who may be the world’s leading authority on the Wire Act, had this to say about the legislation [Schwartz’s comments were made in 2010, a full year before the DoJ’s ruling]:

“Anti-gambling legislation passed by Congress in the summer of 1961 was actually an anti-organized crime measure that only attacked purveyors of gambling because of their important position in the organized crime chain of command. It was not then intended as a sweeping federal effort to curtail public access to gambling.

However, in the act’s half-century lifespan, the DoJ has used it to restrain Internet gambling and punish those who have exercised their right to either establish legitimate businesses or gamble online.


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