GPWA Times Magazine - Issue 19 - February 2012

After addressing the lotteries issue, Weich turned his attention to other forms of on- line gaming, including online poker. “Although the OLC conclusion differs from the Department’s previous inter- pretation of the Wire Act, it reflects the Department’s position in Congressional testimony at the time the Wire Act was passed in 1961. It also provides much needed clarity to those state govern- ments that would like to permit wholly in-state, non-sports Internet gambling , including Internet lotteries” (emphasis added). Weich went on to say that in places where online gaming is clearly illegal, the DOJ would prosecute violators. “Furthermore, in states that ban various forms of gambling – including Internet poker – the Department will be able to investigate and prosecute those gambling businesses under the Unlawful Internet Gambling Enforcement Act and other sec- tions of the criminal code,” Weich wrote. The DOJ’s Wire Act reversal dramatically reshapes the political landscape regarding online gaming. Individual states are now dealing from a position of strength. And how states, and those who support a fed- eral solution to regulating online poker, adapt to the new legal realities will de- termine the shape of the American online gaming market. Advantage states For years, one of the chief stumbling blocks for states considering on- line gaming legislation was the DOJ. Online gaming opponents always cit- ed the fact that DOJ viewed online gaming as illegal, so it didn’t matter what the Unlawful Internet Gambling Enforcement Act (UIGEA) said. In 2005, the DOJ sent a letter to North Dakota instructing them not to sell lot- tery tickets over the Internet because it would be illegal, and states have been gun-shy ever since. This fear of the DOJ is why New York and Illinois wrote letters to the DOJ asking for clarification on the law, even though they believed it was legal to sell lottery tickets online under both the UIGEA and a less restrictive interpretation of the Wire Act. Neither state wanted to get into trouble with the DOJ. Now that states have the DOJ on their side, the political dynamics have shifted. “ If no action is taken by the U.S. Congress . . . the American online gaming marketplace will be remarkably similar to the rapidly fracturing European market, with 50 different states (51 if Washington, D.C. is included) setting their own rules, regulations and laws.” 15 The U.S. market: out of many, one — or every state for itself?