DOJ’s Ruling Could Create Confusion

A few days before Christmas last year the US department of justice released an opinion letter stating that only sports betting is covered by the wire act of 1961 and all other forms of internet gambling are legal. Earlier in the year the very same agency had seized three major internet poker operations so the opinion came as quite a surprise to many in the gaming industry. The opinion letter sparked optimism in the internet gaming industry. Operators started to look for ways to tap into the US gaming market and players in the US hoped for easier deposits and Cashouts. Many states are considering internet gaming as a way to help address budget shortfalls.

Despite all of the optimism some in the gaming industry are remaining cautious despite the DOJ opinion. The letter was a response to an inquiry from New York and Illinois about the legality of online lottery ticket sales. The DOJ letter states “Interstate transmissions of wire communications that do not relate to a “sporting event or contest” fall outside the reach of the Wire Act. Because the proposed New York and Illinois lottery proposals do not involve wagering on sporting events or contests, the Wire Act does not prohibit them.” Since poker, internet bingo and casino games are not ‘sporting events’ most gaming experts say the decision opens the door for legalization. Gaming expert I. Nelson Rose called the letter “a present from the DOJ” and added “I believe this will be a major incentive for the other states looking at legalizing intrastate poker and other games.”

Nevada already has regulations in place and is accepting license applications and could license internet poker rooms sometime this year. If things in Nevada go smoothly other states such as Iowa, California, and Florida will probably move to implement intrastate internet gaming. In New Jersey legalization is inevitable and New Jersey Governor Christie has indicated he will sign legislation currently working its way through the state’s assembly. Rose believes that the ruling may permit interstate and international gaming. Rose wrote “This means there may be nothing preventing states from making compacts with other states, and even foreign nations, once they have legalized an online game, like poker. If Nevada and the District of Columbia want to take Internet poker players from each other, what federal law would they be violating?” Hopefully full nationwide legalization will take place in the near future.