The Department of Justice (DOJ) [official website] clarified its stance on online gambling in a memorandum opinion [text, PDF] released Friday holding online non-sports related gambling that crosses state or international borders is not covered by the Wire Act of 1961 [text]. The opinion dealt with the online, out-of-state sale of lottery tickets in Illinois and New York, but could open the door for online gambling as a whole. Specifically, the opinion suggests that the Wire Act was only meant to regulate sporting events instead of all online gambling. The opinion centers around the interpretation of one section of the Wire Act which states: "Whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest...shall be fined under this title or imprisoned not more than two years, or both." The DOJ limited its interpretation of the law:
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.The opinion shifts the administration's stance in a way that could allow non-sports related interstate online gambling under federal law. The DOJ's opinion ends by saying its stance needs to be reconciled with existing federal legislation.
The Wire Act is not the only law affecting online gambling. In November, New Jersey passed Public Question 1 [JURIST report] by a 65 percent margin, amending the New Jersey constitution [text] to legalize sports gambling. The Washington Supreme Court [official website] ruled last year that a state ban on online gambling [JURIST report] is constitutional. That month, the EU Court of Justice (ECJ) [official website] delivered three judgments striking down gambling restrictions [JURIST report] in Germany because the regulations were not designed to protect public interest. The ECJ upheld a Swedish law restricting Internet gambling [JURIST report]. The Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) [HR 4411 summary] bans banks and financial institutions from intentionally accepting payments from credit cards, checks, or electronic fund transfers related to unlawful Internet bets. This act was passed by George W. Bush in 2006, but enforcement of the bill was delayed [JURIST reports] by the Obama Administration in 2009.