US Department of Justice Opens Doors for Online Poker

The law is open to interpretation and a recent revision by the US Department of Justice (DoJ) of its interpretation of the Wire Act has changed the way in which states may participate in the legalization of online poker. In closing down and controlling poker rooms this past year, the DoJ has called upon the power of two specific laws: the Unlawful Internet Gambling Enforcement Act (UIGEA) and the Wire Act.


US-based online poker could be a reality soon

US-based online poker could be a reality soon

Poker and the UIGEA

The fact is it is not illegal to play poker online in the U.S. But through the UIGEA it is illegal for any bank, financial institution or other such money exchange service to facilitate the transfer of funds outside of the country or to a foreign-based company for the purposes of gambling. It’s under this act that Poker Stars, Absolute Poker and Full Tilt Poker were raided on April 15, 2011, and prohibited from operating in the U.S.

When the DoJ enforced the UIGEA many other poker rooms simply left the U.S. market, fearing that they too would be shut down. This greatly reduced the number of sites that were friendly to U.S. players, causing many professional players to move for foreign countries that were open to online gaming.


The Wire Act

The UIGEA was enacted in 2006, but the Federal Wire Act, which is also known as the Interstate Wire Act, is a much older law. It came into being in 1961 and was developed to stop bookmaking across state lines. The law is fairly wide-ranging in terms of culpability.

It states, “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.”

Although the DoJ had maintained that it included online poker and casino gambling and that the use of computers fell under aegis of the act, they recently revised one part of that interpretation, ruling that the “interstate transmissions of wire communications that do not relate to a ‘sporting event or contest’ fall outside the reach of the Wire Act.”

The Department of Justice eliminated online poker from the Wire Act

The Department of Justice eliminated online poker from the Wire Act

The means the Wire Act does not cover online poker. However computers, which were not being used in homes for the sharing of information until well after the act was created, are considered to be one of the modes of transmission covered. The Fifth Circuit Court of Appeals has ruled in agreement with that interpretation but the Supreme Court has not as of yet offered an opinion.


States Gearing Up

With the new interpretation came a burst of energy amongst Nevada’s legislators who immediately enacted legislation to take advantage of the new online gaming opportunity. Expect to see more states getting involved in online poker legislation, as the large U.S. poker market has been virtually untapped since Black Friday. The DoJ’s announcement is big news for online poker and U.S. players.

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