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Federal decision could mean law may not bar Internet poker
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Alan Feldman
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LAS VEGAS REVIEW-JOURNAL
The U.S. Department of Justice on Friday revealed that it has changed its long-held position and found that the federal Wire Act of 1961 applies only to sports betting.
The new opinion on the Wire Act represents a dramatic shift in policy for the Justice Department, which had long argued that the law made all forms of Internet gambling illegal, including poker.
"(The) admission by the Justice Department that current federal law is insufficient to protect against both off-shore and unregulated Internet gaming proves the clear and urgent necessity for federal action," said Alan Feldman, senior vice president for public affairs at MGM Resorts International, in a statement.
Feldman urged Congress to act, saying with this decision there will "certainly be an unprecedented growth of gambling that provides no consumer protection and permits unlicensed operators access to the U.S. market."
The opinion by the Justice Department comes after it was asked in 2009 to analyze the scope of the Wire Act by New York's lottery division and the Illinois governor's office regarding their plans to use the Internet and out-of-state processors to sell lottery tickets.
In a 13-page legal opinion written by Assistant Attorney General Virginia Seitz dated Sept. 30, the department noted that nothing in the materials supplied by the criminal division suggests that the New York or Illinois lottery plans involve sports wagers but were just lotteries. The opinion was posted Friday.
"Having considered the criminal division's views ... we conclude that interstate transmissions of wire communications that do not relate to a sporting event or contest fall outside of the reach of the Wire Act," Seitz wrote.
The department's conclusion could mean Internet poker isn't barred by any federal statute.
The opinion was announced a day after Nevada gaming regulators adopted rules that would let companies apply for licenses to operate poker websites in the state. A regulatory decision could establish Nevada as the lead regulator of the online poker business.
Washington, D.C., also allows Internet wagering within its borders.
David Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas, was more cautious in his assessment of the federal ruling.
"It lowers one barrier to the eventual growth of intrastate gaming, which will eventually lead to interstate poker," Schwartz said.
Also, the Justice Department on Friday issued identical letters to Senate Majority Leader Harry Reid, D-Nev., and Sen. Jon Kyl, R-Ariz., responding to their July 14 request for clarification of the department's stance toward the legality of online gambling in the United States.
The letter said that the Seitz opinion "provides much needed clarity to those state governments that would like to permit wholly in-state, nonsports Internet gambling, including Internet lotteries."
Assistant Attorney General Ronald Weich assured Reid and Kyl that the opinion "will not undermine the department's efforts to prosecute organized criminal networks."
"The significant majority of our current and past prosecutions concerning Internet gambling involve cases where the gambling activity is part of a larger criminal scheme," Weich wrote.
Supporters of legalizing and regulating online poker applauded Seitz's opinion.
John Pappas, executive director of the Poker Players Alliance, said it provides policymakers at both the state and federal level with the legal confidence to move forward with licensing and regulation of online poker.
"This is a much-needed clarification of an antiquated and often confusing law," Pappas said. "For years, legal scholars and even the courts have debated whether the Wire Act applies to nonsporting activity. Today's announcement validates the fact that Internet poker does not violate this law."
Pappas said the opinion makes it even more important that Congress act to clarify the law.
The American Gaming Association also chimed in with comment.
"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 launderings," the American Gaming Association said in a statement.
Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.
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The software that allowed around 800 million to be stolen with bots from college students. Did it all of a sudden go away? Poker Stars admitted it happen (New york Times bots invade online poker march 15 ) but are looking to correct it . They used this money to lobby Nevada and it almost worked had it not been for the Feds, Nevada was lost in the shuffle even the head of GCB went to work for poker Stars. If April 15. had not happen how much money would have been stolen? Who is capable to monitor code? Not the Owners of Gaming Online Sites and not the phony site auditors and thier claims of security. Are you kidding me.
Russ Hamilton Just lit up a big Cigar called all his friends up and said I told you so.let the games begin.
Couple of comments:
(1) Cynthia - even if they an determine that UIGEA doesn't apply the plantiffs are charged with a number of other crimes, including racketeering, so they are still looking at signficant time. This is in addition to any charges leveled at AP/UB and FT for fraud and theft.
(2) I still don't understand why this is suddenly big news or such a revelation. A Federal judge ruled years ago that the Wire Act didn't apply to Internet poker and, since that was the only Federal law with could possibly apply, internet poker wasn't "illegal" at the Federal level. While some lawmakers and the AG's office sometimes referred to internet poker as illegal they either knew that wasn't the case or were simply ignorant of the court rulings (which is even worse in my opinion).
All this does is have the Federal government finally admit there is no Federal law against internet poker so jurisdiction then falls to the states. Now you couldn't set up an on-line site and allow anyone from other states to access it (at least currently) but individual states can authorize online poker for their residents just like they are the ones making decisions on B&M casinos, allowable games, etc.
The PPA and many knowledgable poker players were aware of this for years so that is why it has been so frustrating for the Federal government to keep trying to attack online poker. Maybe with this acknowledgement that there is no Federal law against it they will either get out of the way or, even better, set up Federal standards to allow access upon state option across the nation as is available in many other countries. The benefit is that sites could be regulated, taxed and audited which would most likely prevent a repeat of the AP/UB and FT fiascos.
how are they going to keep minors from playing?of course this is what they want.
Why do we need a 13 page legal opinion when we have the Tenth Amendment.
Anyone here know it? Go ahead. Paraphrase it for me. Anyone?
Those powers not specifically given to the feds by the Constitution are reserved to the STATES and/or the PEOPLE.
Any specific power in the Constitution regarding gambling? Of any kind? Nope.
the school kids will be excited to earn walk around money playing on line.
Full Tilt and Absolute Poker may or may not be guilty of violating the UIGEA, but they certainly are of outright theft. Hopefully a regulated industry will prevent such a situation in the future. Full Tilt did not pay back players accounts because they didn't have the money. They had already skimmed it off, in true mob tradition. And Absolute Poker did not pay off because, well, because they just decided not to, telling players to go to hell. Undoubtedly these same scumbags will emerge out from under their slimy rocks to start anew. Gaming regulators would be wise to identify all of the principals involved and "Black Book" them all in the future.
And this is why Full Tilt, Pokerstars, etc. will not be convicted of violating UIGEA.
Finally a solution, Nevada will regulate and license all internet poker sites allowed to operate in the USA. It appears everything is ready for JAN/FEB 2012 with all the existing licensed casinos in Nevada.
Any existing offshore internet gaming company will partner with a major player in Vegas and now will be forced to abide by the rules for all!!
duzzat men those so addicted can now online play keno, bingo, or three card monte ? why not ?