The History Of The Sham
I’ve been pretty critical about the apparent stupidity of the U.S. Department of Justice all these years concerning their stubborn refusal to let go of their claims that the Wire Act prohibits online poker and casino gambling in the United States. I very seriously doubt that they have genuinely believed they were right here, but might often makes right, and that’s certainly been the case here.
Here’s how it’s gone. The act explicitly prohibits sports betting crossing state lines. The scope of the law is clearly limited to this type of betting. Laws are often purposely designed to be ambiguous and allow a broader interpretation and applicability, but this legislation did not and was specifically enacted to counter sports betting, period.
The U.S. Department of Justice would prefer this be otherwise, so they claim that it prohibits all forms of internet wagering as well. The courts end up ruling otherwise, explicitly ruling that the Wire Act does not apply to online poker and casino betting. In spite of the courts having the last say here, the Department of Justice chooses to ignore the law here and continue to claim that the Wire Act applies to these betting forms.
The twist here is that the law only applies to legal proceedings, and apparently does not restrict propaganda campaigns based upon purely political agendas. So we were faced to endure a decade of rhetoric from the DoJ, claiming online poker was illegal. Since the goal of all of this wasn’t to prosecute anyone but to merely threaten and misinform, the fact that this wouldn’t stand up in the courts was of no real consequence.
It’s Really Always Been About Politics
There may have been several motives behind all of this, and we really don’t have to look too far to come up with some obvious ones. Governments have no problem with gambling as long as they get a cut, and in this case, they weren’t getting any.
The U.S. government also lost face in the ruling against them by the World Trade Organization, basically holding that whatever U.S. laws that may apply have no real bearing in the ability and justification of offshore gambling operations doing business with their residents. They even had to pay compensation for looking to interfere with this trade.
On top of this, you have the poker rooms themselves flaunting the legal claims of the DoJ, and rightly so, since by any sensible interpretation of the law here they could not be made to hold up anyway. It doesn’t really matter that these claims are clearly without merit, to the extent that anyone with the vaguest notion of how the law works would be able to see through the sham. This was politics, and as we all know, sensibility and politics are often very poorly correlated.
Oddly Enough, This All Changed By Way Of The Power Of Lotteries
Looking to bully offshore gaming operations proved pretty easy for the DoJ. The biggest challenge for them was to get judges to rule in their favor so that they could seize the assets of these foreign companies, but they somehow managed to convince a magistrate to play along with the charade, and had what they needed to do their dirty deeds.
All of this required that they cast a big net out there in terms of what they felt the Wire Act prohibited. If powerful domestic gambling interests were brought into the picture, then they could no longer hide behind their false legal claims, and would now have to back them up with facts, something that would definitely prove to be insurmountable in the face of a real, and powerful opponent.
As it turned out, the state lotteries of New York and Illinois recently became caught up in this mess. Now, the views of the DoJ were potentially conflicting with some very big players, and ones who aren’t going to just roll over in the face of threats. According to the current stance of the DoJ, these lotteries, through their internet operations, were in violation of the UIGEA by way of the Wire Act, in the same manner as online poker and casino sites had been held to be.
So this precipitated a crossroads of sorts, where the DoJ was forced to defend their legal claims in a court of law, or come to their senses and change their position. They wisely chose the latter.
What This All Means For The World Of Online Poker
By backing down from their claims of the applicability of the Wire Act to online gambling, the DoJ was forced to acknowledge that this Act only applies to wagers on sporting events, as the Federal Court had ruled a decade ago. Now it’s certainly not the case that their people finally came to their senses here.
Rather, it is almost certain that they were aware of the incorrectness of their views on this all along, yet chose to maintain them for political reasons. So it takes a bigger political reason to trump a smaller one, and this is exactly what I believe happened.
So in one stroke of the pen, all of their claims against online poker became negated. For instance, in order for the UIGEA to apply to poker sites, the operation of the poker sites itself must first be illegal. So if the Wire Act doesn’t make this so, then all we have left is a few states who clearly make it so, meaning that for the overwhelming majority of the country, there are no legal barriers in force against online poker at all.
This is extremely exciting news for all of us in the online poker industry, from operators, to affiliates, to payment processors, to players. While it is true, as some have speculated, that this will make it much easier for individual states to regulate online poker, without fear of reprisal from the DoJ, there’s also the matter that all of this may not even be needed to return to a day where it was much easier to play poker online in the U.S.
With few exceptions, this opens things up even more than prior to the UIGEA, since the DoJ have claimed that online poker and casino gambling was illegal by way of the Wire Act right from the start, and for the first time, they have abandoned that position.
We’ll have to see how the poker industry reacts to this, and many will be at least somewhat reticent given the pounding that the industry recently took, but there’s no real reason why we haven’t gone from Black Friday to White Friday with this decision, and perhaps a whiter world than we ever have seen.