Cutting the Wire

Cutting the Wire

Cutting the Wire: Gambling Prohibition and the Internet. Reno: University of Nevada Press, 2005.

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Cutting the Wire examines the political, social, and cultural ideas that moved Attorney General Robert F. Kennedy to suggest the Wire Act (a law banning interstate transmission of gambling information), Congress to approve it, and President Kennedy to sign it into law, as well as the consequences of the law.

Since the earliest days of the American republic, citizens had expressed profound ambivalence over gambling, sometimes sanctioning it, and other times prohibiting it. Although many Americans believed that gambling was a harmless recreation, others felt it threatened communities and individuals. The struggle over gambling found expression in laws that made the business, but not the activity, of gambling illegal.

Congress passed the Wire Act to provide an activist Justice Department with a platform from which to prosecute organized crime figures. Indeed, under Kennedy the Justice Department devoted a great deal of time and energy to the drive to “get” organized crime. Although the majority of convictions against suspected organized figures came from prosecutions for tax evasion and similar crimes, the “traveling acts” provided the Justice Department with a firm base from which to attack organized crime that crossed state lines.

By the late 1990s, the political, cultural, and technological landscapes had profoundly shifted. Casino gambling was legal in and regulated by eleven states from Nevada to New Jersey, including several in the Deep South. Poverty-stricken Indian nations brokered compacts with states to build their own casinos and discovered a form of economic development that seemed to succeed where others had failed; this form of gaming received the approval of each of the three branches of the federal government. Forty-seven states (soon to be forty-eight) had some kind of legal gambling, and many states actively encouraged their citizens to gamble on the lottery as a way of bridging budget holes without raising taxes. To an outside observer, it would appear that Americans had become quite comfortable with gambling.

In addition, the emerging technology of the Internet, which made possible virtual chat rooms, instant messaging, and ecommerce, also opened the door for online betting and wagering. In 1998, federal authorities targeted several companies and individuals that operated sites based in the Caribbean (while declining to prosecute operators based out of Australia, which legalized and regulated Internet gambling). Most of those charged either pled to lesser charges or simply refused to return to the United States to face prosecution. Jay Cohen, however, chose to fight the charges. The founder of the World Sports Exchange returned to the United States and was ultimately convicted of violating the Wire Act. His case remains to date the most pointed challenge to the application of the Wire Act to Internet wagering.

So although it was originally intended to strangle the flow of money to organized crime via illegal gambling, the Wire Act has been used for far different purposes. Cutting the Wire presents the story of how this law first developed, how it helped fight a war against organized crime, and how it is being used today-for better or for worse-to restrict the freedom of Americans to place legal wagers over the Internet.

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