Breaking News: DOJ says only sportsbetting violates Wire Act

[star]

I have emphasized all parts of the opening paragraph I believe are news-worthy.

In a story that has broke only an hour or so ago, the U.S. Department of Justice revealed that it has changed its long-held position and found that the federal Wire Act of 1961 only applies to sports betting. This is a potential game-changer in the online poker community, as the DOJ often relied on the law when asserting that all forms of Internet gaming were illegal.

We all knew, or at least assumed, that the Wire Act only applies to sports betting. Unfortunately, the powers in charge did not agree with us. This seems to have changed.

A new interpretation: http://www.telegraph.co.uk/finance/m...e-betting.html

Later

[alexpratt]

I don't know what you mean by "work in the industry" beyond running an affiliated site, as the vast majority here.

Anyway, I will ask anyone who wants to answer, please: WHAT IS THE NEWS?

I already know the Wire ACT only relates to sports. So what, in this admin news release thingy, is news to me?

Shouldn't be too hard a question, given it's such massive news. Someone please put me straight. Thanks.

Good article here (by a lawyer) http://calvinayre.com/2011/12/30/leg...s-barton-bill/

[lots0]

I don't know what you mean by "work in the industry" beyond running an affiliated site, as the vast majority here...

Sorry, I thought you had said before that you didn't work in the online casino business.
***

As more and more lawyers, organizations and business take a look at this new development, they are all seeing the same thing... To QUOTE Law Professor I. Nelson Rose again.. "There is an EXPLOSION of online gambling coming to America". and I for one could not be happier... I been doing the money dance.. OH YA!

From the article Alex posted that was written by Preston Oade, J.D., a partner in the Denver law firm of Holme Roberts and Owen, LLC...

This is a significant legal event. It has significance not just for the Wire Act, but also for the UIGEA. This is because the UIGEA relies on and references the Wire Act definition of unlawful online gambling. One refers to the other, so the two laws are interrelated.

[Caruso]

Good article here (by a lawyer) http://calvinayre.com/2011/12/30/leg...s-barton-bill/

That does clarify entirely. Since they now have the Barton Bill up their sleeves, they can "come clean" about the Wire Act. I was unaware they'd been claiming any additional powers for the Wire Act, beyond sportsbetting.

Slippery so-and-sos, your government.

[TheOnlyPoker]

That does clarify entirely. Since they now have the Barton Bill up their sleeves, they can "come clean" about the Wire Act. I was unaware they'd been claiming any additional powers for the Wire Act, beyond sportsbetting.

Slippery so-and-sos, your government.

Hello Caruso. I received another communication from the US Lawyer i mentioned above, this time on the Calvin Ayre piece. He disagrees with the writer, saying " .. The UIGEA stands on its own and the Wire Wager Act is not a critical prop for the UIGEA." So, there exists a difference of opinion among legal minds.

Addressing the business case, and analyzing the spectrum of legal opinion myself, my conclusion is that the UIGEA is perhaps weakened but has not lost any of its intended effectiveness. The issue swirling around whether unlawful gambling is defined elsewhere other than the Wire Act is academic as far as real world operations are concerned, for the reason that nothing will change at banking transaction level. Moneybookers and NETEller will not change their policy due to this opinion; banks will not suddenly issue VISA and M/C merchant accounts that accept American players based on the OLC opinion; Western Union and the other electronic services will not relax their policies with respect to US gaming transfers. In short, this event will not affect the outlawing of transferring US player deposits to Internet poker operators, unless the player and the operator are both in Nevada.

The US lawyer I'm in discussion with goes on to say: "The only real questions left are whether states can authorize intrastate online poker/gambling and then form a compact among those states that have passed such a law and 2) whether the Congress will amend the UIGEA to specifically permit such compacts pending a passage of a federal online poker bill.."

All the best, and Happy New Year!

[Caruso]

Hello Caruso. I received another communication from the US Lawyer i mentioned above, this time on the Calvin Ayre piece. He disagrees with the writer, saying " .. The UIGEA stands on its own and the Wire Wager Act is not a critical prop for the UIGEA." So, there exists a difference of opinion among legal minds.

The Wire Act says Thou Shalt Not Sports Bet.

The UIGEA says Thou shalt not perform transactions for illegal gambling (that which is already illegal, in a terrestrial sense at federal / state level it would seem).

There may be a clause in the UIGEA that says it "amends" the Wire Act, but to all practical purposes the two bills are clearly distinct. I think to argue that they're "related" because of a legalistic clause with no practical application is pointless. The two acts clearly say different things, and stand on their own merits.

But then, in the light of the Barton Bill, the whole situation changes, as the "we now acknowledge that the Wire Act..." etc is just posturing to pave the way for the new bill.

All the best, and Happy New Year!

Ditto, one and all.

[lots0]

Hello Caruso. I received another communication from the US Lawyer i mentioned above, this time on the Calvin Ayre piece. He disagrees with the writer, saying " .. The UIGEA stands on its own and the Wire Wager Act is not a critical prop for the UIGEA." So, there exists a difference of opinion among legal minds...

The US lawyer I'm in discussion with goes on to say: "The only real questions left are whether states can authorize intrastate online poker/gambling and then form a compact among those states that have passed such a law and 2) whether the Congress will amend the UIGEA to specifically permit such compacts pending a passage of a federal online poker bill.."

Theonlypoker won't name this lawyer... because this lawyer, does not exist.
There is no difference between legal minds... ALL the attorneys that are experts in online gambling agree. The UIGEA and the Wire Act are Dependent and interrelated to each other, The Wire Act was/is the Definition of ILLEGAL GAMBLING that the UIGEA used for criminal prosecutions... Oh wait there were no criminal prosecutions using the UIGEA, all the Justice Department did using the UIGEA was seize money (by using Administrative Process)... from US players.

The ONLY Difference between December, 22, 2011 and now, is how the Justice department INTERPRETS, the Wire Act and the very vague UIGEA.

Funny same person that made up this imaginary lawyer, also made up his affiliate program and is obviously trying to confuse the issue.

There is no guarantee that the Barton Bill will become law. So until there is a NEW law on the books.... the US is wide open to online gambling...

I was unaware they'd been claiming any additional powers for the Wire Act, beyond sportsbetting...

Actually, the DOJ used their 'old' interpretation of the Wire Act and the related UIGEA to enforce laws, that most of us believed did NOT exist.
Actually the DOJ didn't really enforce laws, they just bullied people and business into doing what they wanted.
In other words the DOJ, just did what it wanted, out law online gambling, without any 'real laws' on the books that gave them the authority to do this.
The Justice Dept. has now admitted this with their 'NEW' interpretation of the Wire Act.

[Dominique]

I remember watching a session about UIGEA with bankers and politicians and a rep from the DOJ. I think it was on C-SPAN but not sure.

The bankers kept asking for clarification - what is illegal online gambling? A definition, please?

The DOJ rep repeated herself throughout - the department of Justice considers all online gambling illegal. Never said what law they based it on, though.


The wire act is the only federal law I know of that can be interpreted to apply to online gambling. So, if the wire act only applies to online sports betting, and not to any other form of gambling, then UIGEA must also only apply to sportsbetting.

[TheOnlyPoker]

Dominique, You might want to consider this statement:

"An opinion of the Office of Legal Counsel can be withdrawn or changed, although it is not often done," said Linda Shorey, a partner at K&L Gates LLP in Harrisburg, Pennsylvania, who focuses on gaming laws and regulations.
"Under the U.S. Constitution, only the courts have the authority to determine whether the Wire Act applies to poker wagers," she said. "The Department of Justice memo is not binding on the courts."

Plus, don't forget about case law. If people start digging, they can find rulings that are open to interpretation, on what exactly is unlawful gaming. Most of the discussion on this thread only addresses the tip of the ice-berg; there's a lot below the surface that is not being carefully examined here (yet) IMHO.

Another legal specialist, Greg Gemignani says about the same thing here:

"The legal opinion is just that, an opinion rendered by attorneys in the Obama administration's Justice Department. A new presidential administration could toss the opinion aside with yesterday's junk mail. A federal judge might render the opinion moot.
"You need to take a step back and look at this in context," said attorney Greg Gemignani of Lionel Sawyer & Collins, an expert on Internet gaming law. "This is not a green light to fire up the online poker servers by any means."

There are actually seven federal statutes that can apply to illegal gaming, and various ways to extend their reach to the Internet, if some aggressive AG decides to give it a try.

[TheGooner]

And that's ignoring the face that the "wire act" of 1961 was clearly never designed to be used to regulate and internet medium that was still 30-35 years away.

This whole dance around the definitions have no basis in fact - and the reaility is that with the vast financial and legal resource that the US Doj has - the "wire act" the UIGEA and the potential Barton bill mean whatever the DoJ wants them to mean. No judge wants to rock the boat and jepardise their legal careers.

Finally - a thought. I use a satelite system for internet connection. No wires involved. Not covered in the wire act.
Does that technology circumvent the "wire act"?

What about Wi-Fi or mobile WAP applications? None of that is mentioned
Sheesh !!

[Caruso]

The wire act is the only federal law I know of that can be interpreted to apply to online gambling. So, if the wire act only applies to online sports betting, and not to any other form of gambling, then UIGEA must also only apply to sportsbetting.

The UIGEA does say this:

The term 'unlawful gambling' means to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use of a communication facility where such bet or wager is unlawful under any applicable Federal or State law in the State or tribal lands in which the bet or wager is initiated, received, or otherwise made.

I believe NY State and Washington have anti-poker laws.

[TheOnlyPoker]

The UIGEA does say this:

The term 'unlawful gambling' means to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use of a communication facility where such bet or wager is unlawful under any applicable Federal or State law in the State or tribal lands in which the bet or wager is initiated, received, or otherwise made.

I believe NY State and Washington have anti-poker laws.

Chuck Humphrey's website is a good one for monitoring which states have laws in place:

[Dominique]

There are a bunch of states that have anti online gambling laws. These are independent from the wire act.

[Dominique]

The last paragraph of the official DOJ statement reads like this:

Given that the Wire Act does not reach interstate transmissions of wire communications
that do not relate to a “sporting event or contest,” and that the state-run lotteries proposed by
New York and Illinois do not involve sporting events or contests, we conclude that the Wire Act
does not prohibit the lotteries described in these proposals. In light of that conclusion, we need
not consider how to reconcile the Wire Act with UIGEA, because the Wire Act does not apply
in this situation. Accordingly, we express no view about the proper interpretation or scope of
UIGEA.

[TheOnlyPoker]

The UIGEA does say this:

The term 'unlawful gambling' means to place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use of a communication facility where such bet or wager is unlawful under any applicable Federal or State law in the State or tribal lands in which the bet or wager is initiated, received, or otherwise made.

I believe NY State and Washington have anti-poker laws.

I ran into this statement by Preston Oade over on 2+2, which i find very interesting, to say the least. I wonder if this would hold true under fire..

" With respect to the banks, there are several perfectly legal ways to make deposits to offshore poker sites. These include electronic transfers and paper checks. The UIGEA doesn't even require banks to track or trace paper checks as the payee is handwritten and the banks told Congress that it isn't feasible to do this. Thus the UIGEA has a specific provision saying the banks only have to block deposits when it is "feasible" to do so. "

[lots0]

Accordingly, we express no view about the proper interpretation or scope of UIGEA.

This statement from the Justice Department, really says it all.

So what is the 'Proper' interpretation of the UIGEA?
No one knows... not even the Justice Department.

So we have a law on the books, the UIGEA, that the Chief law enforcement agency in the United States says flat out they don't know what it means or how to interpret(enforce) the law.

The Wire Act no longer Applies to Poker or Casino Gambling... The UIGEA is unenforceable.

You don't need to have phony affiliate program to figure out what this means...


***

New York does NOT have specific laws against online gambling...

What New York does have is this;

Sec. 5-401.

Illegal wagers, bets and stakes. All wagers, bets or stakes, made to depend upon any race, or upon any gaming by lot or chance, or upon any lot, chance, casualty, or unknown or contingent event whatever, shall be unlawful.

and the definition..

"Gambling" A person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome.

So new York does not have any specific laws against ONLINE Gambling, but the New York Attorney has decided that section 5-401, covers ALL gambling in ALL forms, including ONLINE gambling.

Only Washington State has specific laws on the books against online gambling.

[TheOnlyPoker]

Yet another US attorney who does not view the OLC opinion through Rose-coloured glasses...

Second, and more significantly, the DOJ opinion does not change the current legal status of online poker. Online poker has been illegal since its inception and remains illegal today.

The first step in analyzing the legality of online poker is to recognize that gambling has historically been regulated at the state level, as a function of a state's police powers. Most states banned all gambling until recently, while a few (notably Nevada and New Jersey) were far ahead of the curve in permitting some forms of regulated, legal gambling.

There are a number of federal laws that criminalize gambling related activities; e.g., the Wire Act, the UIGEA, the Travel Act, and the Illegal Gambling Business Act to name a few of the more prominent. These laws, however, are generally dependent on violations of state gambling laws as a predicate act triggering federal criminal liability. Congress could, if it wished, use its Commerce Clause power to preempt the field of gambling law (or just online gambling law—which it might do if online gambling seems inevitable at the state level). But instead, Congress essentially lets each state determine the level of legalized gambling it wants available to its residents. Federal law then provides the legal tools needed to apprehend criminals who try to evade state gaming laws by crossing state lines in some aspect of operating an illegal gambling business.

The next analytical step is the key to understanding online gambling regulation. Currently, every state either bans poker or regulates poker as a form of gambling. To be a bit more precise, every state either bans operating a poker game for profit or only permits such for-profit poker business subject to strict state regulations; even though the playing of poker may not be illegal in many states, the offering of poker as a business (e.g., as a casino, card room, or online poker site) is the key operative activity subject to state regulation.* Note that I said "poker" and did not distinguish between live and online poker, because most states do not make that distinction.

Now many poker players assert that online poker is not illegal under state law unless the state law specifically bans online gambling. I'm not certain where this argument comes from, but it's pretty sketchy legal reasoning. If it's illegal under state law to run a for-profit poker room in your basement, simply setting up a computer server across state lines to run your poker game online doesn't magically make your poker business legal (or beyond the law). As I have discussed in prior posts on jurisdictional issues, states have routinely exercised criminal jurisdiction over people outside the state's borders who engage in illegal conduct that affects people within the state's borders (a prime example is child pornography or solicitation). If a company uses the Internet to offer gambling within a state where that form of gambling is illegal outright or only legal subject to state regulations, then that company is breaking state gambling laws. Break the state gambling laws, and the federal gambling statutes kick in. Presto! We have Black Friday.

As of right now, it's safe to say that poker is either illegal altogether or regulated as gambling in every state. As of right now, no gaming company has ever been licensed by any state gaming commission to offer online poker (or online gambling of any kind). Therefore, online poker is, and always has been, illegal under existing state gambling laws. States that added a specific statutory or regulatory prohibition against online gambling did so to make the law crystal clear or to strengthen penalties, not because there was some online gambling loophole that made online poker legal.

In sum, the new DOJ Wire Act opinion has no immediate effect on online poker. Online poker remains illegal under state law as it exists today. However, Nevada and other states may soon begin issuing licenses permitting gaming companies to offer intrastate online poker. If and when multiple states permit online poker, then one should expect multi-state consortiums to develop to permit online poker play between residents of states with similar online poker regulations. Nonetheless, the days of unlicensed foreign companies like PokerStars or Full Tilt offering online poker are at an end. All hail the new, licensed, regulated, domestic online poker sites!

[Dominique]

Only Washington State has specific laws on the books against online gambling.

Not so. Look at the collumn on the very right:


http://www.gambling-law-us.com/State-Law-Summary/

[boczom1]

In sum, the new DOJ Wire Act opinion has no immediate effect on online poker. Online poker remains illegal under state law as it exists today.

Sounds like BS to me. How many states specifically have laws in place that say online poker is illegal ?

Must be some attorney that's just looking for attention & hits to his site..

[TheOnlyPoker]

Sounds like BS to me. How many states specifically have laws in place that say online poker is illegal ?

Must be some attorney that's just looking for attention & hits to his site..

No offense meant, but that's exactly how I see Rose. Nothing against him either, as I've never met the man, and have always liked his stuff. However, we who are in the business have our hind-end on the line, 'big time', if you get what i'm saying. We treat this very seriously. I would love to believe in Santa too, but the fallout is life threatening. These attorneys, bless them, don't have a dawg in the race, and talk is cheap. For me, that's just not the case. So i'm studying this very carefully. I know a lot more today than i did 10 days ago, that's for sure, and i've been in the business as long as Jay Cohen (was).