DoJ Clears Major Online Poker Hurdle

Great job by Brian Pempus of Cardplayer Magazine and www.cardplayer.com, who reported Friday that the United States Department of Justice released a legal opinion that offered clarification on the Interstate Wire Act of 1961 — a federal law which has complicated efforts to legalize Internet poker.

Online grinders such as American and WSOP Europe Main Event champion Elio Fox could back at the virtual felt by May of 2012.

Essentially, the DoJ is now saying the Interstate Wire Act applies only to sports betting – not online poker.

Here is the rest of Pempus’ reporting on the interpretation, which from a timing standpoint falls in line with a reported deal between the DoJ and the proposed buyers of Full Tilt Poker, along with Nevada’s recently approved rules for allowing online poker within its borders.

Sources at Wickedchopspoker.com speculate Nevada residents could be legally playing online poker as soon as May 2012.

According to Pempus and Cardplayer.com:

“… the 13-page document dated Sept. 20, 2011, says the correct interpretation is that the law only prohibits sports betting.

The Wire Act was once interpreted as outlawing all forms of gambling across state lines, and was used by the DOJ in its prosecution of the operators of online poker sites.

One of the causalities of the Wire Act was Anurag Dikshit, co-founder of then PartyGaming, who reached a $300 settlement with the DOJ in 2008 for violating its provisions. The Internet gaming company subsequently left the U.S. market, but is now eying a return via a partnership with Las Vegas-based MGM Resorts.

Despite Nevada making substantial progress toward intrastate online poker, the memo was in response to New York and Illinois seeking to use the Internet for lottery sales. In fact, there is no mention of poker in the opinion from Assistant Attorney General Virginia Seitz.

Nonetheless, Anthony Cabot, attorney for Fertitta Interactive, said that the “significant decision” gives states the right to legalize 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 said.

According to Cabot, since web poker is legal in Nevada and will occur intrastate, it’s completely legal under the Unlawful Internet Gaming Enforcement Act — a 2006 federal law banning financial transactions for gaming activities that are deemed illegal.

If poker on the web is legal in a given state, the UIGEA, which was a tool in charging the offshore operators in poker’s Black Friday, would not be implicated.

When asked if this all gives Nevada brick-and-mortar casinos the ability to eventually operate interstate, Cabot cautiously said it does.

“It is now conceivable that states can get together and try a compact, which is an agreement between the states to offer wagering,” Cabot said. “That has happened in the past, with regards to non-Internet based wagers, for example the state lotteries. Now, this will obviously require some negotiations between the states as to how you handle tax matters and those things.”

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.

The AGA declined to comment at this time on whether interstate online poker could now happen without a federal measure.

As for a jurisdiction with Internet gaming on the horizon, both Cabot and Whittemore don’t see Nevada speeding up the implementation of online poker as a result of the DOJ’s new position. “Nevada is going as fast as it possible can already,” Cabot said. ”

In more simplistic terms, it appears December 23, 2011 was a very good day for online poker.

****
Speaking of Heinz, my homegamers scoffed at my assertion that the talented and now very rich German pro paid ZERO taxes on his more than $8.7 million for winning the Main Event.

Here is proof, courtesy of pokernewsreport.com.

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