Regulated Online Poker Coming To America

Just before Christmas the U.S. Department of Justice confirmed what many shrewd observers had figured out a long time ago — online poker in the U.S. was not illegal under the infamous Interstate Wire Act of 1961. Specifically, the Wire Act only referred to sports betting.

This will prove a pyrrhic victory for the legal advisors of PokerStars, Full Tilt Poker, and UltimateBet/Absolute Poker whose advice post-Unlawful Internet Gambling Enforcement Act in 2006 indicated as much.

Companies such as PartyGaming erred on the side of caution and interpreted poker as being outlawed under the act but a 13-page document dated Sept. 20, 2011 and published at the Justice.gov website says the correct interpretation is that the law only prohibits sports betting.

This info seems too little too late for the big hitters in the game who were forced out of the market after Black Friday and some of whose owners remain under indictment.
However the news bodes well for online poker generally and, in particular, for our American cousins.

When the decision was published Anthony Cabot, attorney for Fertitta Interactive, said it was significant and gave states the right to legalise a wide range of games for the Internet, without violating the Wire Act.

“It clears a legal point that has been out there for a long time, as to whether or not states can go forward and legalize games of chance or poker, within their own borders,” he confirmed.

“Now the federal government will have to act relatively quickly if they want a federal regime to regulate online poker,” he added.

Ellen Whittemore, attorney for Nevada web poker applicant, International Game Technology (owner of Euro-facing poker network Entraction), also said the legal opinion “cracks open the door” for the interstate offering of poker.

While gaming consultant and professor I. Nelson Rose suggested that the DOJ’s new position could conceivably lead to U.S.-based online poker operators having their rooms open to an international player pool.

Elsewhere, the American Gaming Association, which has been behind federal web poker legislation and not a state-by-state patchwork, responded to the announcement from the DOJ, saying it “validates the urgent need” for Congress to act.

So where does this leave online poker in the U.S. in 2012? Well Nevada is well down the road of regulating and licensing while New Jersey’s governor has rowed in behind legislation there, which is likely to swing the vote in favour of legal poker.

It will remain to be seen if there is significant movement at federal level in the short term but with states now in no uncertain terms acting within the law by creating a legal framework, this will move ahead regardless and, as the number of states (and operators) grow, there will surely be a move towards federal regulation as the pro-business issues of scale, efficiency, and consolidation come to the fore.

2012 is likely to be the year we welcome legal online poker to the U.S. and not before time too. ♠