Justice Dept. confirms that most intrastate online gambling is legal

Josh Peterson Tech Editor
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The Department of Justice has confirmed the reversal of a long-standing precedent that applied a 1961 federal gambling law to Internet gambling. The DOJ now considers non-sport intrastate gambling legal, a victory for state lotteries.

The 1961 Wire Act prevents “wired” bets from taking place over phone lines. The law, until recently, has been applied to all bets taking over the Internet. The federal legalization of online gambling has been a controversial topic among lawmakers.

The casino industry has argued for stronger federal policing of online gambling, citing concerns about fraud and theft.

Deputy Attorney General James Cole wrote in a letter to William J. Murray, Deputy Director and General Counsel for New York State Division of the Lottery, “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.”

Democratic Senate Majority Leader Harry Reid, of Nevada, and Arizona Republican Sen. Jon Kyl sent a letter in July to Attorney General Eric Holder, asking the DOJ to reiterate its position on the law.

“[I]f for some reason the Department is reconsidering its longstanding position, then we respectfully request that you consult with Congress before finalizing a new position that would open the floodgates to Internet gambling,” wrote Reid and Kyl. (RELATED: Full coverage of the Department of Justice)

The senators asked in July for the DOJ “to strengthen the penalties for those who violate the law and to see what modifications would be helpful to enhance its ability to fight Internet gambling.”

The DOJ’s response provides “a much needed clarification of an antiquated and often confusing law,” said John Pappas, executive director of the Poker Players Alliance.

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