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 September of 2011, the US DOJ issued their formal legal opinion to the public concerning the scope and reach of the law. In essence, they determined that the law only applies to US based sports betting, and that casino gambling and poker gambling activities fall outside of the range of application of the Federal Wire Act.

CONCORD, N.H. (AP) — A federal judge ruled Monday that a law prohibiting interstate wagering applies only to sports gambling, setting aside a Justice Department opinion that some states feared would make online lottery activities including Powerball illegal and put the programs they fund at risk.

Judge Paul Barbadoro’s ruling comes in response to a suit filed by the New Hampshire Lottery Commission in February, which said a Justice Department opinion issued last year subjects its employees to prosecution, creates uncertainty about whether it should cease operations and could cost the state more than $90 million a year.

Data gathered by The Associated Press shows states would have been at risk of losing $220 million in net profits annually if the Justice Department had targeted single tickets sold online or more than $23 billion under the broadest interpretation that would have prohibited all lottery-related activities that use the internet, including popular games like Powerball.

“Today’s ruling is a historic victory for the State of New Hampshire and we are proud to have led this effort,” Gov. Chris Sununu said in a statement. “New Hampshire stood up, took action, and won — all to protect public education in our state.”

A spokesman for the Justice Department said it “is reviewing the decision and declines to comment further at this time.”

Matthew D. McGill, who represented the NeoPollard, Interactive, which operates the state’s online lottery, said the ruling will not be limited to New Hampshire. Michigan, New Jersey and Pennsylvania filed friend-of-the court briefs in this case.

“Because the court ‘set aside’ the Justice Department’s incorrect re-interpretation of the Wire Act, this ruling has nationwide impact,” he said in a statement. “Throughout the country, state lotteries and others in the gaming industry once again can rely on the Justice Department’s 2011 opinion that the Wire Act is limited to sports betting.”

But the Coalition to Stop Internet Gambling, which is backed by GOP megadonor Sheldon Adelson and filed an amicus brief in support of the Justice Department in the case, argued the ruling was limited and would likely be appealed.

“While we disagree with many of the views expressed in Judge Barbadoro’s ruling, we are happy that the scope of the opinion was confined to the parties involved,” the group said in a statement. “We are confident that other jurisdictions will see this issue very differently and our resolve to protect at-risk populations has only been strengthened by today’s decision.”

The case revolves around the Wire Act, a 1961 law meant to target the mob that prohibits interstate wagering. Decades later and with the internet ruling everyone’s lives, New York and Illinois asked the Obama administration whether selling lottery tickets online violated the law.

The department in 2011 concluded that online gambling within states that does not involve sporting events would not break the law. But the agency changed its mind in November, interpreting the act as applying to any form of gambling that crosses state lines, not just sports betting.

But on Monday, Barbadoro said New Hampshire had the standing to sue and that the Wire Act was limited to sports gambling.

Federal Law On Sports Betting

Much of his argument came down to the interpretation of the language in the Wire Act, with the judge agreeing with the commission and the 2011 ruling that the law was meant for sports betting even though one clause only mentioned bets and wagers. The Justice Department argued the fact this clause didn’t mention sports betting by name meant the law could be interpreted more broadly.

The judge also sided with the commission in determining it was at risk of potential prosecution, rejecting the Justice Department’s request to dismiss the lawsuit. The Justice Department had filed a memo in the case suggesting that its opinion didn’t address state lotteries and that it was in the process of determining whether the Wire Act applied. It said federal prosecutors had been advised not to enforce the November opinion until a decision was made.

But the state argued the prosecutions would still be possible and argued further delays in the case could complicate the state’s budget process, since a key source of revenue comes from lottery revenues.

Scenario: College basketball teams are playing in their respective league championship tournaments and soon the “NCAA March Madness” brackets will be announced. Many sports fans are accustomed to placing a friendly wager on a favorite team. Your office colleagues decide to set up a little game. It does not harm anyone, and participation is totally voluntary. Is it permissible?

Answer: While betting a few dollars on sports is often viewed as a harmless social pastime, if done at work it violates the Federal regulations that prohibit gambling for money or property in the Federal workplace. Predicting teams that will advance in a college basketball bracket purely for fun or picking winners to claim bragging rights in the office are not the types of conduct that generally raise concerns.

Federal rules on gambling prohibit employees from gambling while on duty, or while on government-owned or leased property, unless necessitated by their official duties. These restrictions apply not only to Federal employees, but also to members of the public at large, contractors, vendors, and exhibitors when on GSA-controlled property. The rules are found at 5 CFR section 735.201 and 41 CFR section 102-74.395. (CFR = Code of Federal Regulations)

Violations of the regulations may be cause for disciplinary action by the employee’s agency, which may be in addition to any penalty prescribed by law.

The only authorized exception is for activities and games that take place during the time period of the annual Combined Federal Campaign (CFC), in accordance with Executive Order 12353. However, CFC raffles are not synonymous with gambling when conducted in accordance with part 950 of title 5 of the Code of Federal Regulations.

Legally defined, gambling requires 3 elements:

• A game of chance,
• Consideration for the opportunity to play the game, and
• An offering of a prize.

A game of chance includes, but is not limited to, a raffle, lottery, sports pool, game of cards, the selling or purchasing of a numbers slip or ticket, or any game for money or property. Consideration includes a participation fee, a wager of money, and something of value in return for the possibility of winning a reward or prize. A prize would include a monetary award, or a tangible or intangible item. Examples include meals, drinks, administrative leave, gift certificates, tickets to events, or cash.

In addition to the OPM and GSA regulations, the Department of Health and Human Services (HHS), Office of the Chief Information Officer (OCIO), Policy for Personal Use of Information Technology Resources, HHS-OCIO-2006-0001, section 5.4.3 (2/17/06), prohibits the use of government equipment, such as computers and e-mail, for illegal gambling activities. This includes related e-mails sent from a personal account if done using a government computer.

Violations of this policy may be cause for loss of use or restricted use of government equipment, disciplinary action, or financial liability.

Federal Law Regarding Sports Gambling Rules

Note that the Randolph-Sheppard Act which covers the existence of the convenience stores on campus permits them to sell state lottery tickets.