ELRA could explode on this news
On the eve of Christmas Eve many were in awe at the release of a statement by the The U.S. Department of Justice revealing that it has changed its long-held position and found that the federal Wire Act of 1961 applies only to sports betting.
The new position on the Wire Act marks a huge shift for the Justice Department, which has long relied on the law when asserting that all forms of Internet gambling, especially online poker, is illegal.
“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,” U.S. Deputy Attorney General James Cole wrote in a letter on Friday.
“(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.
Supporters of Internet gambling were glad for the clarification, but said the federal government needs to create more regulations.
The Justice Department’s office of legal counsel is saying that the criminal division got it wrong on the Wire Act. “We conclude that the Criminal Division’s premise is incorrect and that the Wire Act prohibits only the transmission of communications related to bets or wagers on sporting events or contests,” the new legal opinion says. In a letter sent on Friday to Senate Majority Leader Harry Reid, Assistant Attorney General Ronald Weich said: “in states that ban various forms of gambling–including Internet poker–the Department will be able to investigate and prosecute those gambling businesses under the Unlawful Internet Gambling Enforcement Act and other sections of the criminal code.”
Here’s what the Wire Act says:
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.
The Justice Department had understood the “of bets or wagers or information assisting in the placing of bets or wagers” bit to ban all types of interstate gambling, not just sports. But according to the OLC,
Reading “on any sporting event or contest” to modify “the transmission . . . of bets or wagers” produces the more logical result. The text could be read to forbid the interstate or foreign transmission of bets and wagers of all kinds, including non-sports bets and wagers, while forbidding the transmission of information to assist only sports-related bets and wagers. But it is difficult to discern why Congress, having forbidden the transmission of all kinds of bets or wagers, would have wanted to prohibit only the transmission of information assisting in bets or wagers concerning sports.
Mark Hichar, a partner who heads the gambling law group at Edwards Wildman, said the opinion could potentially open the door for states to cooperate together on lottery initiatives and other gambling offerings like Internet poker and other casino games. “The Department of Justice at long last has removed a cloud that existed with respect to intrastate Internet wagering and we have yet to see how far reaching its implications will be,” Hichar said.
