Online poker players, hold on to your butts. According to a report from Online Poker Report, the United States Department of Justice is working on a new opinion of the Interstate Wire Act of 1961, known simply as the Wire Act, that will say that it applies to all forms of online gambling, rather than just sports betting. Yeah. That’s not good.
The Wire Act currently 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.
Wire Act and Online Poker
Though it clearly specifies that the it is bets on sports that are illegal, the Department of Justice used to interpret it to mean that all online gambling was illegal. Not much came of that interpretation, as online poker sites still operated in the U.S., but the specter still loomed. The UIGEA, despite dealing a blow to online poker in the States (though famously, PokerStars, Full Tilt Poker, UltimateBet, and Absolute Poker all continued to accept U.S. customers), did say that states could legalize internet gambling within their own borders.
Illinois and New York asked the DoJ about the Wire Act, as they wanted to launch online lottery ticket sales that, while being restricted to in-state customers, would use out-of-state transaction processors. The fear was that the Wire Act and UIGEA conflicted in this area, the UIGEA allowing it, the Wire Act not.
In late 2011, the DoJ’s Office of Legal Counsel (OLC) issued a clarification of the Wire Act, saying that it did, in fact, only apply to sports betting. This opened the door for states to be able to not only legalize and regulate online poker, but to form interstate compacts and have people from different states play on the same tables.
But now the Department of Justice may end up reversing that opinion. Online Poker Report emphasizes that the opinion may not end up being issued. The fact that this is even a thing, though, does not give us the warm fuzzies.
If there is a silver lining, an Department of Justice opinion does not change the law. It is unlikely that the internet gambling industries of Nevada, Delaware, and New Jersey would go away, as they are one hundred percent legal. Same for Pennsylvania, though that state’s industry has not gotten off the ground yet.
The U.S. Fifth District Court of the Appeals also ruled in 2002 that the Wire Act only applies to sports betting, so if the federal government tried to shut down states’ online poker industries, there would at least be some precedent to make a counter-argument.