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1st Circ. Ruling Is a High-Wire Act for Sports Betting Market


The First Circuit's recent ruling that the federal Wire Act's prohibition on interstate communications for wagering applies only to sports betting affirmed a narrow view of the 60-year-old criminal law that attorneys say is a major win for the online lottery and gambling industries, even as it highlights the obstacles for the growing legalized sports betting market.


"It definitely creates a little bit of a dichotomy," said Blank Rome LLP white collar defense and gambling attorney Dennis M.P. Ehling. "So you have the ability to do interstate wagering on poker or casino games or other games of chance, but not sport. And sport is definitely one of the fastest growing areas of gambling today."


The challengers to the DOJ's 2018 interpretation had raised concerns that they could not guarantee that data for online lottery transactions, even if initiated in the state, did not cross state lines through "intermediate routing." Ehling said that issue continues to be a concern for online and mobile sportsbooks, raising the possibility that someone placing a bet legally in one state could still violate federal law because the transmission may bounce around the network across state lines.

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"1st Circ. Ruling Is a High-Wire Act for Sports Betting Market," by Zachary Zagger was published in Law360 on January 25, 2021.