August 7, 2006

The Legal Ambiguity of Online Gambling

There is a lot of ambiguity today about online gambling. And while that ambiguity may be cleared up for everyone real soon, the current state ofthe industry is grey grey grey.

A recent wired article takes a look at the gaming industry, to try and decipher wether its ok, or not ok, to win those poker tournaments online.

The House bill that would ban internet gambling -- except for horse race betting and state lotteries -- is an attempt to close a perceived loophole in the 1961 Wire Act, one of a series of laws meant to crack down on racketeering.
Similar legislation failed in the House in 2000, but many blame that on the efforts of disgraced lobbyist Jack Abramoff, who is accused of spending lavishly to get the bill killed on behalf of an online lottery company.

The Wire Act explicitly forbids businesses from using a wire communication facility to assist in placing bets on "any sporting event or contest." But the wire law doesn't cover other types of casino betting, a federal appeals court in New Orleans has ruled, leaving some doubt whether prosecutors can shut down Internet poker and other casino games.

Of course, with or without a new law from Congress, the Justice Department interprets all online gambling to be illegal. Other countries allow it, so online companies have set up operations outside the United States but with easy access to U.S. players and their computers.

"Online poker is online gambling. And online gambling, we would say, is illegal," Justice Department spokeswoman Jaclyn Lesch said.

Read the whole article at Wired