Caroline Pham, Acting Chairperson Commodity Futures Trading Commission Page 12 of 13 For example, the Fifth Circuit held that the Wire Act prohibits only interstate online sports betting. In re MasterCard Int’l Inc. , 313 F.3d 257, 263–64 (5th Cir. 2002). The DOJ Office of Legal Counsel issued an opinion in 2011 supporting the Fifth Circuit’s interpretation that the Wire Act applies only to interstate sports betting. However, in 2018, after the Supreme Court overturned the PASPA in Murphy v. NCAA , the DOJ issued another opinion concluding that the Wire Act prohibits a broader scope of interstate gambling communications. 12 In response to the DOJ’s 2018 opinion, the First Circuit reaffirmed what the Fifth Circuit previously decided, and held that “[l]ike the Fifth Circuit, and the district court in this case, we therefore hold that the prohibitions of section 1084(a) apply only to the interstate transmission of wire communications related to ‘any sporting event or contest.’” N.H. Lottery Commission v. Rosen , 986 F.3d 38, 61– 62 (1st Cir. 2021). Since the First Circuit’s determination in 2021, no other Court of Appeals has considered the question of whether the Wire Act prohibits more than just interstate gambling communications related to sporting events. But according to caselaw and DOJ opinions interpreting the Wire Act, interstate online sports betting is uniformly considered an unlawful activity under federal law. Therefore, listing or trading Sports Contracts, which requires the interstate transmission of sports wagers, is prohibited under 17 C.F.R. § 40.11(a)(1). In addition to violating federal law under the Wire Act, Sports Contracts also violate IGRA and its implementing regulations. First, as discussed above, Sports Contracts constitute Class III gaming. And under IGRA, Class III gaming activity conducted on Indian lands is lawful only when such activity is: (1) authorized by a tribal ordinance or resolution; (2) located in a state where such gaming is permitted; and (3) conducted pursuant to an IGRA compact. 25 U.S.C. § 2710(d)(1). Because Sports Contracts are not geographically restricted so as to avoid Indian lands—and are therefore offered on Indian lands—all Sports Contracts must be conducted pursuant to an IGRA compact. See e.g. , Coeur d’Alene Tribe v. Idaho , 842 F.Supp. 1268, 1282 (D. Idaho 1994) (finding that state lottery conducted on Indian lands in the absence of a tribal gaming ordinance or compact violated IGRA). Across the board, Sports Contracts are neither authorized by a tribal ordinance or resolution nor conducted pursuant to Tribal- State gaming compacts, and directly contravene IGRA compacts. As such, Sports Contracts also violate federal law under IGRA. F. If Sports Contracts Do Not Involve Gaming or Violations Of State and Federal Law, They Involve “Similar Activity” Contrary To The Public Interest.
12 See Reconsidering Whether the Wire Act Applies to Non-Sports Gambling , 42 Op. O.L.C. 158 (Nov. 2, 2018) (accessible here); Whether the Wire Act Applies to Non-Sports Gambling , 35 Op. O.L.C. 134 (Sept. 20, 2011) (accessible here).
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