According to a recent ruling by the U.S. Justice Department, online poker may have been legal all along. The DOJ’s Office of Legal Council (OLC) has re-examined the wording of 1961’s Federal Wire Act, the law which, up until now, has stifled the existence of both intra and inter-state gambling.
The discussion was raised anew thanks to questions raised by lawmakers in Illinois and New York. Both states had been inquiring as to the legality of the online sale of lottery tickets within their borders. Up until now, their efforts had been squelched by the DOJ’s Criminal Division, acting on a long-standing reading of the law.
“We conclude,” reads a statement from the OLC, “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.”
Since online poker is considered to be neither a sporting event or contest, it would appear that players and pro-poker legislators have a new leg to stand on.
But what about the dreaded Unlawful Internet Gambling Enforcement Act? It, as players well know, prevents individuals and corporations from knowingly accepting online gambling payments for activities deemed to be unlawful. But now that online poker seems to be within the letter of the law, would the acceptance of such transactions really be deemed as “unlawful?”
This decision, by the way, was written by Assistant Attorney General Virginia Seitz and handed down back in September, but is just now being made public.
Let’s take a look at exactly what all the fuss is about. Cue the Wire Act, subsection 1084(a):
“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.”
In their memo to the Criminal Division, the OLC spends several page dissecting the exact meaning of these phrases. When all is said and done, they have concluded that the long-popularized reading of the text does not take into the circumstances and available transmission means surrounding the drafting of the law. This is especially true, they say, when considering that Congress at the time was mainly concerned over the transmission of bets involving horse racing, football, basketball, and baseball both on the professional and collegiate level.
Not surprisingly, the Poker Players Alliance is working itself into a frenzy over what they perceive to be a clear vindication of their cause.
“This,” said Executive Director John Pappas, “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.”
What such a ruling would mean in regards to the events of Black Friday, one can only speculate. If online poker was indeed allowed within American borders, would the government be forced to surrender funds seized during the purges? And what could it mean for the recent purchase agreement between the Full Tilt, Group Bernard Tapie, and the DOJ?
So far, officials have been fairly tight-lipped on these questions. One potential indicator of their mood comes in the form of a letter from the DOJ to Senators Harry Reid and Jon Kyl, both of whom had been critical of the department’s handling of online gambling law.
“OLC’s conclusion will not undermine the Department’s efforts to prosecute organized criminal networks,” they wrote. “The significant majority of our current and past prosecutions concerning Internet gambling involve cases where the gambling is part of a larger criminal scheme. OLC’s conclusion will not undermine our ability to use other powerful tools, such as the federal statutes prohibiting organized crime, racketeering, and money laundering, to prosecute that type of criminal conduct. Furthermore, 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.”
These words would seem to act as an indictment to companies like Full Tilt, PokerStars, and UB/Absolute Poker. However, these (somewhat justified, in Full Tilt’s case) sour grapes do not take into account the formation of brand new, American-run poker sites.
For now, this remains an incredibly complicated (and often confusing) subject. But thanks to the OLC, American poker players finally have something to crow about. While it won’t bring back the seized bankrolls or allow them to return to the digital felt, it could speed the rise of a fully legal online poker industry on U.S. soil.
Read the full statement from the DOJ’s Office of Legal Council here.