Wire Act Applicable only to Sports Betting per DOJ memo

Posted by James Guill on Dec 23, 2011 Posted in Legal Poker News | No Comments »

The Federal Wire Act of 1961 has been used for years by the United States Department of Justice as a tool in their fight against online poker.  For year, it has been interpreted to mean that online gambling and poker is illegal.  That changed earlier Friday when the DOJ released a memo that clearly states that the Wire Act applies only to betting in association with sporting events or contests.

The memo was issued by Virginia A. Seitz, Assistant Attorney General, and was a response to concerns that about whether Illinois and New York would be in violation of the Wire Act if they were to sell tickets over the internet and out-of-state.

The main point of contention in the Wire Act stems from subsection 1084(a).  It reads as follows,

“Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.”

Early in the memo, Ms. Seitz sums up her view as follows:

“Having considered the Criminal Division’s views, as well as letters from New York and Illinois to the Criminal Division that were attached to your opinion request,1 we conclude that interstate transmissions of wire communications that do not relate to a “sporting event or contest,” 18 U.S.C. § 1084(a), fall outside of 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, in our view, prohibit them.”

Later in the memo, Seitz addresses the language of subsection 1084(a).  Many take the phrase of “or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers” to make the law applicable to all online gambling.  According to Seitz, she feels that the language of “both provisions are limited to bets or wagers on or wagering communications related to sporting events or contests.”

The memo from Seitz effectively puts to an end a debate that has been raging since 2006 in regards to the Wire Act.  Executive Director of the Poker Players Alliance John Papas praised the revelation, claiming 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 news is viewed by many as an early Christmas present and comes less than one day after Nevada became the first state in the US to approve online poker regulations.  With the clarification of the Wire Act in place, many feel that other states can proceed with their regulation efforts.  Others feel that this may give Congress the green light to consider online poker legalization.

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