Intrastate Online Gambling Is Legal, According to the U.S. DOJ

More info arrives about the unexpected change of heart

Ever since the Department of Justice announced its different position regarding the US Wire Act, the industry has been seeking more detail and more answers as per what such a sudden change of heart actually implies.

The simplest answer may be – the DoJ assessed that individual states are allowed to license and regulate non-sports related intrastate online gambling.

Such a positive outcome for the online gambling industry arrived as a DOJ response to inquiries from New York and Illinois about online lottery sales and a letter written by Senate Majority Lead Harry Reid (D-Nev.) and Sen. Jon Kyl, (R-Ariz.) who asked for a clarification on the legality of online gaming.

It was in a letter to Reid and Kyl that the DoJ announced its changed position regarding the Wire Act, specifying that the decision came thanks to the fact that its Office of Legal Counsel (OLC) reviewed the law.

According to Assistant Attorney General, Ronald Weich, "The Wire Act only applies to the transmission of bets or information assisting in the placing of bets or wagers relating to sporting events or contests.

"Since state lotteries conducted by New York and Illinois do not relate to sporting events, OLC concluded that the operation of these lotteries would not violate (the law)," he said.

Addressing the question of other forms of online gambling, such as online poker, which triggers the biggest interest among legislators, as there have already been quite a few initiatives to legalize it, Weich added: "Although the OLC conclusion differs from the Department's previous interpretation of the Wire Act, it reflects the Department's position in Congressional testimony at the time the Wire Act was passed in 1961. It also provides much needed clarity to those state governments that would like to permit wholly in-state, non-sports Internet gambling, including Internet lotteries."

However, on a more serious note, Weich warned that the DoJ will prosecute those who break the law, in places where online gaming is clearly illegal: "Furthermore, in states that ban various forms of gambling -- including Internet poker -- the Department will be able to investigate and prosecute those gambling businesses under the Unlawful Internet Gambling Enforcement Act and other sections of the criminal code.

"Of course, if Congress wishes to give the federal government greater enforcement authority over non-sports related Internet gambling, it could do so by amending the Wire Act."

So far, no explanation has been offered as per why the OLC memo on the Wire Act, which written by Assistant Attorney General Virginia Seitz and dated September 20, 2011, has only been released days ago.

Nevertheless, the decision has triggered a lot of joy in the public, and it has been openly welcomed by organizations such as the Poker Players’ Alliance and the American Gaming Association.

It has been stated by John Pappas, executive director of the Poker Players Alliance that “This is a much needed clarification of an antiquated and often confusing law. For years, legal scholars and even the courts have debated whether the Wire Act applies to non-sporting activity. Today’s announcement validates the fact that Internet poker does not violate this law.

"This will provide policy makers at both the state and federal level with the legal confidence to move forward with licensing and regulation of online poker and other non-sporting activity within their respective jurisdictions," he added. "However, it is our hope that our federal policy makers see this as an incentive to move quickly to enact federal licensing and regulation before various states produce a mix of individual state schemes that may not be the best model to serve consumers."

In addition, the American Gaming Association opined that "The Department of Justice’s interpretation regarding the scope of the federal Wire Act validates the urgent need for federal legislation to curb what will now be a proliferation of domestic and foreign, unlicensed and unregulated gaming websites without consistent regulatory standards and safeguards against fraud, underage gambling and money laundering."

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