DoJ Updates Wire Act Interpretation

January 02, 2012 | News Category: Gaming Law

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In the last couple of weeks in 2011, there was an interesting statement that came from the United States Department of Justice regarding online gambling. Up until this time, the DoJ had considered that the Wire Act of 1961 could be interpreted to include all forms of online gambling, and not only sports betting.

Using the new interpretation, the Wire Act only applies to sports betting, and not to any other forms of online gambling, as had previously been decided. This would mean that other forms of online gambling that has previously been considered illegal on a federal level in the United States will not be illegal according to the Wire Act of 1961.

In conclusion, the DoJ's statement noted: "Interstate transmissions of wire communications that do not relate to a sporting event or contest falls out of the reach of the Wire Act."

The Wire Act of 1961, however, is not the only piece of legislation that affects the legality of online gambling in the United States. There is also the very well known UIGEA (Unlawful Internet Gambling Enforcement Act) that considers any financial transactions to do with online gambling to be considered illegal, in effect making all forms of online gambling illegal.

At this stage, it is still unclear as to what changes will take place in the United States for the various forms of online gambling, although there is renewed optimism that online poker and other forms of online gambling, such as online casinos may benefit from this change of interpretation in the near future.

There are of course those that feel a federal solution may be the best solution to regulate an legalize online gambling. The American Gambling Association commented on the issue as follows: "Federal legislation that protects states' rights can establish uniform safeguards to protect US consumers, keep children from gambling on the Internet, and provide the tools law enforcement needs to shut down illegal Internet gambling operators. Federal guidelines also would prevent fraud and money laundering, address problem gambling and ensure players aren't being cheated."

In the UK, a number of online gambling groups have profited from the announcement, with share prices jumping up after the US Department of Justice made its announcement. Party Digital Entertainment jumped an incredible 29.7 percent, while the long-established Ladbrokes share price went up by 4.1 percent, and William Hill's share price went up by 6 percent.

Online casino players in the US will want to keep track of the developments that take place as a result of this announcement.