US prosecutors: Hey, you know how we said 'net gambling was OK? LMAO, we were wrong

2011 ban on interstate, foreign sports betting extended to online lotteries, poker, casinos

Last November, US Justice Department officials, having reviewed the nation's laws, quietly concluded that, oops, interstate and international internet gambling is actually illegal. For some reason, that view was only made public on Monday. And for now, this hot take is not being enforced across the country.

Published here [PDF], the opinion was written by the DoJ's Office of Legal Counsel, and is effectively a screeching U-turn on seven years of policy. In 2011, the office concluded that 18 US Code § 1084(a), which makes it illegal to use phones and telecommunications to gamble across state lines and the border, only applied to sports betting.

Well, the office was asked to think that over again, and it's come to another conclusion: online poker and similar internet gambling dens are also verboten, not just sports betting. That means e-casinos and online poker rooms with interstate and foreign players are operating illegally, according to the office's legal eagles.

“Having been asked to reconsider, we now conclude that the statutory prohibitions are not uniformly limited to gambling on sporting events or contests,” the legal opinion reads.

“Only the second prohibition of the first clause of section 1084(a), which criminalises transmitting 'information assisting in the placing of bets or wagers on any sporting event or contest,' is so limited. The other prohibitions apply to non-sports-related betting or wagering that satisfy the other elements of section 1084(a).”

The law in question was passed in 1961, and at the time, was intended to ban interstate and international wagering over the phone or telegraph, and the transmission of “information assisting in the placing of bets or wagers.”

Gambling industry analyst Chris Grove told Reuters while the change won't affect big betting operations located offshore, online state lotteries and e-casinos in the country, whose annual revenues combined are just under US$500m, would be hit.

In the new opinion, the DoJ explained the operation of the 1961 act:

Section 1084(a) consists of two general clauses, each of which prohibits two kinds of wire transmissions, creating four prohibitions in total. The first clause bars anyone in the gambling business from knowingly using a wire communication facility to transmit “bets or wagers” or “information assisting in the placing of bets or wagers on any sporting event or contest.” The second clause bars any such person from transmitting wire communications that entitle the recipient to “receive money or credit” either “as a result of bets or wagers” or “for information assisting in the placing of bets or wagers.”

Back in 2011, DoJ decided the law was ambiguous, and gave a green light to non-sports betting. In the wake of that, some states – New Jersey, Nevada, and Delaware, notably – allowed interstate online gaming.

There's expected to be a 90-day hold on prosecutions based on the new position, to allow companies and individuals to adjust – and, El Reg would bet*, to lobby to have the decision reversed (*only figuratively, since we don't want to break the law). ®

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