DOJ Deems Online Poker Excluded from the Wire Act

December 30, 2011

You may have heard the buzz about the next step toward Internet poker becoming legal in the US or seen the story on television news, and many people are seeing a light at the end of the tunnel when it comes to regulating online poker in the United States. A recent statement released by the Department of Justice is at the root of all the talk. The statement touched on the Wire Act of 1961, clarifying its standpoint on Internet gambling and online poker, and actually reveals that online poker is not covered under the Wire Act whatsoever. In the future, this will make it easier for companies that exited the Internet poker market in the US because of violations of the Wire Act, including Full Tilt Poker, pending the transfer of funds from the DOJ to the Bernard Tapie Groupe that is taking over the former online poker room.

In the statement, US Deputy Attorney General James Cole made a comment regarding the statement that said, “The Department’s Office of Legal Counsel (“OLC”) has analyzed the scope of the Wire Act, 18 U.S.c § 1084, and concluded that it is limited only to sports betting.”

The fact that the Wire Act doesn’t apply to online poker is pretty much the best news that the online poker community, the Poker Players Alliance, the American Gaming Association, and online poker sites aside from Internet poker being deemed legal in the US.

Following the statement by the DOJ, the AGA is currently seeking federal legislation for Internet casino gambling and Internet poker. The AGA says, “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 laundering.”

The AGA believes it’s in the job of the federal government to set up a federal regime that would regulate and license Internet poker, rather than leave it to the individual states. They feel that multiple laws at the state level would limit customer choice across the country and leave gaps in control, which could lead to under-age gambling online, money laundering, and fraud. They also see problems with potential revenue, as state limits on player pools would be dictated by intrastate laws.

In order to prevent these potential negative outcomes that would only hinder the success of the industry, the AGA is attempting to implement “federal legislation that protects states’ rights, establish uniform safeguards to protect US consumers, keep children from gambling on the Internet and provide the tools law enforcement needs to shut down illegal Internet gambling operators.”

The PPA has also responded to the DOJ’s statement. It says, “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.”


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