How the Wire Act Bars Blockchain-Based Sports Gambling

Technology and innovation attorney Samir Patel authored an article for Bloomberg Law exploring the legality of blockchain-based sports betting. Online sports gambling has become a multibillion-dollar industry, projected to hit $180 billion by 2030. However, though sports gambling became legal in the U.S. in 2018, the 1961 Federal Wire Act (Wire Act) and the 2006 Unlawful Internet Gaming Enforcement Act (UIGEA) remain in effect and present legal risks for companies attempting to enter the blockchain space. The Wire Act prohibits businesses from using interstate communication technology to handle sports wagers, leaving companies in the tricky position of ensuring they aren't taking bets from individuals outside the states where they are licensed. The UIGEA prohibits a business from knowingly accepting payments in connection with unlawful internet gambling, though it says that intermediate routing of data does not determine where the bet is made. In this article, Mr. Patel explains how these two laws complicate the landscape for blockchain-based sportsbooks and analyzes options for businesses to pursue in this area.

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