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On Friday the Department of Justice issued a legal opinion which states that the Federal Wire Act of 1961 is only applicable to the prohibition of sports betting across state lines. Up until now, the Wire Act has been one of the many hurdles in the way of legalized online poker in the United States.

The DOJ clarification of the Wire Act came in response to the states of New York and Illinois seeking to use the internet to conduct lottery sales. In the DOJ’s public release they concluded:

“Given that the Wire Act does not reach interstate transmissions of wire communications that do not relate to a ‘sporting event or contest,’ and that the state-run lotteries proposed by New York and Illinois do not involve sporting events or contests, we conclude that the Wire Act does not prohibit the lotteries described in these proposals.”

“In light of that conclusion, we need not consider how to reconcile the Wire Act with UIGEA, because the Wire Act does not apply in this situation.

“Accordingly, we express no view about the proper interpretation or scope of UIGEA.”

The DOJ was clear throughout their release that this does not affect the enforcement of the UIGEA in any way. Under the UIGEA, there is still a prohibition on any person “in the business of betting or wagering from accepting any credit cards or funds from another person in connection with the latter’s participation in ‘unlawful Internet gambling’.”

The UIGEA also specifies that their definition of “unlawful Internet gambling” does not include bets that are both “initiated and received” exclusively within a single state. This is the opening in the law that states such as Nevada and California have recently been using in attempts to set up their own within-state internet gambling operations.

While this DOJ statement won’t have much of an effect on the current online poker landscape in and of itself, it may prove to be a good momentum builder. The Poker Player’s Alliance issued a press release following the DOJ’s public release which applauds the DOJ for their statement and helping to clarify the confusing web of laws regarding online poker.

The PPA will likely use this DOJ statement to help renew political interest in the clarification of confusing laws regarding online gambling, as well as the potential of legalized online poker. The PPA and other groups are calling for members of government to give a serious look at the benefits of regulated online poker, including potential revenues, accountability among licensees and clearly defined laws at a federal level. The PPA press release specifically mentions Congressman Joe Barton’s HR 2366 as a bill which:

“…would create a U.S. regulated online poker framework, requiring all online poker sites to measure up to strict safety and consumer protection standards – requirements that do not exist today. More importantly, this bill will create an open and competitive market, giving players a choice of many sites on which to play against others from across the country and the world.”

The PPA is an American non-profit group which is dedicated to the promotion of poker and the protection of players’ rights. The organization was founded in 2005 and by April 2008 they claimed to have reached 1 million members.