New DOJ ruling changes the online gaming landscape

Posted by Steve Ruddock on Dec 26, 2011 Posted in Poker News | No Comments »

It may not be legalized and regulated online poker but the ruling by the US Department of Justice this past Friday does pave the way for a total shakeup of the way online poker (and all forms of online gambling) legislation is sought.

On Friday the DOJ released a ruling stating that the 1961 Wire Act’s “prohibitions relate solely to sport-related gambling activities in interstate and foreign commerce,” an absolute about-face on their previously long-held stance.

The decision dates back to September when States looking to expand into intra-state lotteries questioned whether or not they would be in violation of the 1961 Wire Act, and as gaming law expert I. Nelson Rose put it on his blog (http://www.gamblingandthelaw.com/) they may have unintentionally paved the way for legalized online gambling throughout the country:

“If the Wire Act is limited to bets on sports events and races, what other federal anti-gambling statutes are left? There are prohibitions on interstate lotteries, but Powerball and the other multi-state lotteries show how easily these can be gotten around, even before Congress passed an express exemption for state lotteries. And poker is not a lottery under federal law.”

Most online poker advocates from Rose, to Calvin Ayre, to the Poker Players Alliance, are viewing the ruling as a boon for their cause and the first real step in the process of online poker legislation. The reason for the industry-wide optimism is that the ruling basically gives individual states carte blanche to offer online poker without fear of running afoul of the federal government.

Furthermore, as Rose points out, intra-state online poker (and therefore international online poker) is also a possibility:

“…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? And, if they agreed that their residents could bet with licensed poker operators in, say, Antigua and England, while residents of those nations could bet with poker operators in Nevada and Washington, we know they would not be violating the Wire Act, or the anti-lottery laws, or any of the federal prohibitions which require that the gambling be illegal under a state’s laws.”

As Rose and most of the other experts in this field see it, the Wire Act was the federal government’s sole bastion of defense against online gaming, and it would seem that they have inadvertently torn-down their last defense on their own this past Friday in a ruling that seems to have been made to allow states to create online lotteries. Now the proverbial flood-gates have been opened as the wording expressed in the ruling allows for so much more than mere lotteries.

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