Team Obama to Permit Online Gambling to Raise Billions More in Tax Revenues
Posted By Vicki McClure Davidson on December 26, 2011
Screenshot of Pokerstars online gambling site, one of the three major poker sites busted and closed down by the FBI back in April
The world of online poker will be changed as a result of a new interpretation by Team Obama of the Wire Act of 1961, which has made it illegal to place wagers via telecommunications that cross state lines or international borders. The Obama administration is hoping to raise billions more in tax revenues.
And that new interpretation of the act is making gamblers and other potentially nefarious folks very happy.
You may recall that in April, three of the biggest online poker websites — PokerStars, Full Tilt Poker, and Absolute Poker — were shut down by the FBI for fraud, money laundering, and illegal gambling. Restraining orders were also issued against more than 75 bank accounts used by the online poker companies and their payment processors, as well as five Internet domain names.
Reported by Reuters, Web gambling gets boost from Obama administration:
The Obama administration cleared the way for states to legalize Internet poker and certain other online betting in a switch that may help them reap billions in tax revenue and spur web-based gambling.
A Justice Department opinion dated September and made public on Friday reversed decades of previous policy that included civil and criminal charges against operators of some of the most popular online poker sites.
Until now, the department held that online gambling in all forms was illegal under the Wire Act of 1961, which bars wagers via telecommunications that cross state lines or international borders.
The new interpretation, by the department’s Office of Legal Counsel, said the Wire Act applies only to bets on a “sporting event or contest,” not to a state’s use of the Internet to sell lottery tickets to adults within its borders or abroad.
“The United States Department of Justice has given the online gaming community a big, big present,” said I. Nelson Rose, a gaming law expert at Whittier Law School who consults for governments and the industry.
The question at issue was whether proposals by Illinois and New York to use the Internet and out-of-state transaction processors to sell lottery tickets to in-state adults violated the Wire Act.
But the department’s conclusion would eliminate “almost every federal anti-gambling law that could apply to gaming that is legal under state laws,” Rose wrote on his blog at www.gamblingandthelaw.com.
If a state legalized intra-state games such as poker, as Nevada and the District of Columbia have done, “there is simply no federal law that could apply” against their operators, he said.
The department’s opinion, written by Assistant Attorney General Virginia Seitz, said the law’s legislative history showed that Congress’s overriding goal had been to halt wire communications for sports gambling, notably off-track betting on horse races.
Congress also had been concerned about rapid transmission of betting information on baseball, basketball, football and boxing among other sports-related events or contests, she summarized the legislative history as showing.
“The ordinary meaning of the phrase ‘sporting event or contest’ does not encompass lotteries,” Seitz wrote. “Accordingly, we conclude that the proposed lotteries are not within the prohibitions of the Wire Act.”
The department expressed no opinion about a provision in the law that lets prosecutors shut down phone lines where interstate or foreign gambling is taking place.
From Computer Business Review, US internet gambling receives shot in the arm from US DOJ:
According to the US Justice Department, online betting not related to sporting events falls outside the reach of federal law.
The US administration has given a go-ahead for states to legalise some forms of online betting.
According to the US Justice Department (DOJ), online betting not related to sporting events falls outside the reach of federal law.
Though the opinion was more to do with lottery tickets in particular, it has opened the gates for states to allow some forms of online betting.
According to the Wall Street journal, as of now, Internet poker is legal only within Nevada state and though Washington, D.C. has legalised it, it has not yet been implemented. Many states are interested in online gambling as it allows them to raise tax revenues.
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