The United States Department of Justice (DOJ) recently released an opinion that will end up changing the face of online gambling in the USA. The revamped opinion opens the door to a variety of online gaming becoming available in regions where it has been heavily contested previously.
Proponents of online gaming have stated that legalization can provide much needed revenues in state coffers. Large casino interests, however, in addition to others with interests linked to them have stated that they would prefer a national system limited to online poker. The justification for this is that, due to the borderless nature of the Internet, it is not really suitable for state level regulations.
The new opinion from the Department of Justice was written in September and released to the public on December 23, 2011. It reverses the policy that the department has clung to for most of the past ten years which held that most online gambling activity was illegal under the Federal Wire Act. This act, from 1961, prohibits bets from passing through communication lines that cross state borders. In the era in which it was created, it was conceived to prevent players from phoning bets in across state lines.
Historically, the DOJ has stated that, based upon its interpretation of the act, states should not allow online gambling at all – even for players placing bets within the borders of their states of residence.
In a dramatic change of perspective, the DOJ Legal Counsel stated that gaming within a state would no longer be viewed as illegal per the Wire Act. The act is fraught with contradictory language and has incited much debate about the specific meaning and appropriate interpretation of sections. The revised interpretation by the DOJ is that it does not apply to any forms of gambling other than sports betting.
This change green-lights online gambling within specific state borders. This is a great victory for proponents of state-regulated online gambling, including companies that hope to provide the technological backup for online gambling and lotteries.
This decision came out one day after the State of Nevada’s regulators adopted the first ever state regulations for online poker – Nevada now allows companies to operate poker sites for state residents.
The city of Washington, D.C. voted this year to allow the lottery to operate an online poker game, but the law as yet to be acted upon. A number of state lotteries have already been offering subscription services for lotteries, allowing players to purchase a block of tickets for future games. Statehouses and lotteries from various states have considered the option of online gambling, some of which would include online poker.
The new opinion from the DOJ pertains specifically to intrastate gaming, meaning that the bets are taken and placed within the particular state’s borders. This does not address interstate gaming, though experts have opined that it is likely to be considered legal as long as both of the states involved consider it to be legal.
Melissa Riahei, former General Counsel to the Illinois state lottery, stated that this change of stance will help out state governments. She now acts as a lobbyist for U.S. Digital Gaming, and it will certainly reinforce the arguments that she has to make.
DOJ spokeswoman, Laura Sweeney, said in an emailed statement that the department would still be able to investigate and prosecute gaming businesses under laws other than the Wire Act.