Wire Act Looms Large Over U.S. Sports Betting, Survey Shows

The enduring impact of the 1961 federal Wire Act is the most significant legal and regulatory overhang for the rapidly expanding U.S. sports wagering market, according to the preliminary findings of the VIXIO GamblingCompliance and SBC U.S. Sports Betting Regulatory Survey.

Over 28 percent of several dozen initial respondents to the first-of-its-kind survey identified the Wire Act as the regulatory issue most likely to impede market growth in the coming years.

A lack of enforcement against offshore operators was the second biggest issue, selected by 19 percent of senior industry executives, legal experts, compliance officials and regulators.

The Wire Act, which prohibits interstate transmissions of any sports bets and requires separate servers to be installed in every state with legal sports wagering, was also identified as the most burdensome or costly regulatory restriction for sportsbook operators, ahead of high taxes and fees, the need for multiple market-access partners in different states, and official league data requirements.

Meanwhile, over half of survey participants picked the Wire Act as the single most important issue that could be addressed in Congress in the event of federal legislation. However, almost 60 percent said the continued status quo of strictly state-by-state regulation was preferable to any federal interference in sports betting.

Elsewhere, respondents to the survey during the first two weeks of November were split on whether Ohio or Massachusetts would be next to legalize online sports betting, even though more than 70 percent do expect one of those two states to be next to join the post-PASPA party.

More than half believe an accelerated expansion of online sports betting - already legal in 14 states plus the District of Columbia - to be the main policy consequence of the COVID-19 pandemic during 2021. But 25 percent picked an acceleration of new laws to allow iGaming, which is currently legal in just five states.

The VIXIO/SBC U.S. Sports Betting Regulatory Survey was launched ahead of SBC’s Betting on Sports America – Digital summit taking place on December 1 and 2.

During the summit, VIXIO GamblingCompliance will host a virtual roundtable with industry experts to discuss the survey and key the regulatory and compliance challenges in the U.S. sports betting market at 2pm ET on Wednesday, December 2.

Register for the Betting on Sports America - Digital conference and expo for free here.