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Internet Gambling Coming to a State Near You? What the DOJ’s Change of Heart Means for the Immediate Future of Internet Gambling
03 Feb 2012 by Andrew Fleischman in Fordham University School of Law, Online Gambling, U.S. Regional News / 3 Comments
Reeling from the federal shutdown of the three biggest Internet gambling websites in April 2011, there was little confidence left in the online gambling industry that the U.S. was any closer to legalizing online gambling as 2012 neared. The Unlawful Internet Gambling Enforcement Act (UIGEA) offered a glimmer of hope to states seeking to legalize intrastate online gambling, but the statute seemingly left the Wire Act’s prohibitions in tact. Chances of Congressional action evaporated after two bills calling for federal legalization of online gambling were shelved indefinitely in the fall.
On December 23, 2011, however, in response to several state lottery requests that the DOJ formally reiterate its position on whether the Wire Act prohibits non-sports interstate gambling transmissions, the Department announced it was abandoning its long-held position that the Wire Act proscribed all forms of Internet gambling. The DOJ reversed course, officially adopting the view that the Wire Act only prohibits interstate sports gambling transmissions, allowing states to offer lottery games over the Internet to in-state customers without fear of violating federal law.
While this was certainly welcome news to the state lottery boards, the biggest winner is undoubtedly the Internet gambling community. The DOJ long-maintained that all Internet gambling transmissions, even intrastate ones, violated the Wire Act, arguing that all Internet transmissions inherently travel across state lines. This position effectively prohibited all forms of online gambling in the U.S. Under the DOJ’s new interpretation, however, only Internet sports bets violate the Wire Act, enabling states that choose to do so, to legalize casino-style (non-sports) Internet gambling.
Under the DOJ’s new take on the Wire Act, states that legalize online gambling will still have to comply with certain federal regulations. UIGEA provides that intrastate online gambling is not considered “unlawful” so long as the state utilizes certain safeguards to ensure that the bettor is physically located in a state where Internet gambling is legal and that the bettor is at least 18 years of age. Sports betting over the Internet is still proscribed by the Wire Act.
As states strapped for cash desperately search for new sources of revenue, expect state-regulated online gambling to get a good, hard look from many state legislatures in 2012. It may not be long before a revitalized online gambling industry in the U.S. ushers in federal legalization.
But, more on that in the coming blog posts…
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Post Tags: internet gambling, online gamblingAbout the Author: Andrew Fleischman
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3 Comments
gale schwartz
liked your article- thanks for sharing
06 Feb 2012 08:02 pm (@Twitter)
Mark Ellis
Great post! I read about this in the New York Times and I was interested to see where this issue was headed! Looking forward to reading the blog in the future!
08 Feb 2012 03:02 pm (@Twitter)
Evan Goldberg
Liked the article Andrew. It’s about time the government got their act together and capitalized on the tax revenue literally just sitting there for the taking.
09 Feb 2012 06:02 pm (@Twitter)
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