The Obama administration gave states and the gambling industry an early Christmas present December 23 in the form of a controversial Department of Justice (DOJ) opinion that reversed years of federal policy covering online gambling. As reported by Reuters News Service, previously the DOJ had 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 recent DOJ opinion, dated in September but released only in late December, makes the qualification that “[i]nterstate transmissions of wire communications that do not relate to a ‘sporting event or contest’ fall outside the reach of the Wire Act.”
The New York Times reported that the opinion, in the form of a memorandum, came in response to “requests by New York and Illinois to clarify whether the Wire Act of 1961 … prevented those states from using the Internet to sell lottery tickets to adults within their own borders.” The Times added that while the memorandum “dealt specifically with lottery tickets, it opened the door for states to allow Internet poker and other forms of online betting that do not involve sports. Many states are interested in online gambling as a way to raise tax revenue.”
Steven Grossman, Massachusetts’ state treasurer and the chairman of the state’s Lottery Commission, fairly drooled over the potential as he told the Times that the opinion represented a “turbocharged opportunity to engage new markets.” He predicted that the move “will put additional pressure on Congress and others to allow online poker and other Internet gambling.”
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