United States v. Lyons

Sports Off Shore (SOS) was a gambling business based in Antigua, where certain forms of bookmaking were legal. SOS served customers from the United States and took those customers’ bets over the telephone and internet. SOS customers bet on team sports and horseracing, among other things. SOS customers could place funds on deposit with SOS and place bets against those funds, which was permissible under Antiguan law. SOS also allowed customers to place bets on credit, which was not always legal in Antigua. Customers who wanted to place bets on credit were given a password and customer code to place their bets by telephone or over the internet. SOS employed agents in the United States to settle the accounts of credit bettors by collecting amounts owed by losing bettors and paying amounts owed by winning bettors. Daniel Eremian (defendant) worked as an SOS agent in Florida, where sports betting was illegal. Eremian told bettors how they could bet with SOS on credit and settled bettors’ accounts in person or through subagents. Todd Lyons (defendant) worked as an SOS agent in Massachusetts, where sports gambling arguably was permissible. Lyons told bettors how to make bets with SOS, collected losses and distributed winnings, and served as SOS’s bank in Massachusetts by collecting money from and disbursing money to other agents. In 2010, a federal grand jury charged Eremian, Lyons, and other SOS affiliates with illegal gambling and other crimes. A jury ultimately convicted Eremian and Lyons of violating the Wire Act by transmitting bets or betting information, or assisting in the transmission of bets, by telephone and the internet. Lyons and Eremian appealed their convictions, asserting arguments including that (1) the trial court should have instructed the jury that the safe-harbor provision of the Wire Act protected communications that assisted in the transmission of bets between two places where sports betting was legal, and (2) the Wire Act was inapplicable to the internet because, among other reasons, the statute was enacted in 1961, before the internet was invented.