Federal Wire Act Reexamined

01/27/2012
By Tommie ClarkGoogle

The United States Department of Justice released a surprising statement saying that the Federal Wire Act of 1961 applies only to sports betting.  This is quite significant for the online casino industry because the USDOJ has used the 1961 act to outlaw all form of internet gambling and to authorize enforcement.  James Cole, the Deputy Attorney General, wrote that the USDOJ’s Office of Legal Counsel reanalyzed the act (18 US Code, Chapter 50) and came to the conclusion that it is only applicable to sports betting.

 

Alan Feldman of MGM said that the fact that the Justice Department has come to the conclusion that it does not have the legal power to deal with casino online gambling only makes the urgent need for federal legislation that much more clear and apparent.  Internet gambling supporters were very happy about the Justice Department’s clarification, though they continued to stress the need for clear government regulations to encourage a safe casino games industry in the US. 

 

When push comes to shove, what the Office of Legal Counsel is saying is that the Criminal Division of the DOJ misunderstood the law and ran with it.  The reexamined legal stance of the Office of Legal Counsel says that the Criminal Division has basically made an error, and therefore the premise upon which they were prosecuting was erroneous as well.  The Wire Ace only authorizes the Criminal Division to prosecute those who engage in transmissions related to sports betting and wagers.

 

Ronal Weich, the Assistant Attorney General, sent a letter to Harry Reid (D-NV) explaining that if individual states choose to outlaw various forms of gambling, the USDOJ will still be empowered to prosecute via the Unlawful Internet Gambling Enforcement Act.  The UIGEA was used in spring to shut down a number of USA online casinos.

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