The 1961 Federal Wire act was put in place to prevent bookies from coordinating gambling rings over the phone. You can read the text of the law here.
While I think it is a waste of money to gamble, I question whether this is within the federal government’s jurisdiction. The constitution was very clear when it said:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
Today, the justice department spends a lot of resources to track internet gambling sites, arrest their owners, and find US citizens participating in such activity. In my opinion, this is a waste of time and resources.
Furthermore, it violates the individual’s rights. They have as much a right as you do to throw their money at stupid causes. Hey, we didn’t arrest you for that massive “investment” in Beanie Babies that you made back in the 90’s.
For more laws that should not exist at the federal level, check out the Tenth Amendment Center’s blog.