The Wire Act: What You Need to Know About the Law Congress Passed Affecting Online Gambling 2. DOJ reverses opinion on online gambling, clears way for regulated industry 3. Nevada Leaves Door Open For Online Poker Regulation 4. No federal law stops states from legalizing internet gambling 5. The rise and fall of online poker in America
In 2011, the Department of Justice issued a legal opinion that classified most forms of online gambling as illegal under the Wire Act. This was a reversal of the DOJ’s earlier interpretation of the law, which allowed certain forms of online gambling such as fantasy sports. The new opinion effectively shut down the American online poker industry, which had been growing rapidly prior to the ruling.
However, in December 2017, the DOJ reversed its position once again, clearing the way for states to regulate and license online gambling operations. This change in policy could pave the way for a regulated American online poker industry.
Nevada is one of the few states that has already taken steps to legalize and regulate online poker. In February 2018, the Nevada Gaming Control Board issued regulations that would allow licensed casinos in Nevada to offer online poker to residents of other states. However, these regulations are currently on hold pending approval from the federal government.
So far, no federal law has been passed prohibiting states from legalizing internet gambling. In fact, several lawmakers have proposed bills that would legalize and regulate online gambling at the federal level. However, these bills have not yet been approved by Congress.
The rise and fall of online poker in America is a cautionary tale about how government regulation can impact an industry. In 2006, when the DOJ first issued its opinion that online gambling was illegal under the Wire Act, the American poker industry was booming. However, once it became clear that online gambling was illegal under federal law, many banks stopped processing payments for PokerStars and other leading poker websites. This caused many Americans to lose access to their bankrolls and led to a sharp decline in traffic at PokerStars and other leading sites.
The situation continued to deteriorate as state regulators began shutting down unlicensed poker sites. In 2011, Black Friday finally brought down PokerStars and two other leading poker websites when federal authorities seized their domains and charged their owners with money laundering offences. This led to a long-lasting decline in traffic at all major US-facing poker sites.