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Ruling increases odds for online gambling legalization

In April, the agency shut down three foreign-based online poker firms.

Story highlights

  • The Act's prohibition of wagers via telecommunications refers to bets on a "sporting event or contest"
  • The Wire Act refers to bets on an event, poker would be except because poker is itself the event
  • The Department of Justice has aggressively enforced the ban on online poker

Online lotteries and poker may be poised to become legal thanks to a new decision by the Justice Department reinterpreting the Wire Act of 1961.

The decision, written in September but made public last Friday, found the Act's prohibition of wagers via telecommunications crossing state lines or international borders refers only to bets on a "sporting event or contest" and not to lottery tickets sold online. The decision doesn't mention online poker, but some reason that the ruling will pave the way for online poker.

"The United States Department of Justice has given the online gaming community a big, big present," Prof. I. Nelson Rose wrote on his blog, Gambling and the Law.

"If the Wire Act is limited to bets on sports events and races, what other federal anti-gambling statutes are left?" wrote Rose. "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." Rose continued that since the Wire Act refers to bets on an event, poker would be except because poker is itself the event.

The DOJ has aggressively enforced the ban on online poker. In April, the agency shut down three foreign-based online poker firms -- Absolute Poker, Poker Stars and Full Tilt Poker -- charging that each of the companies had violated the law by serving U.S. residents.