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Chips are down for online gamblers as US moves toward new ban

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By Agence France-Presse

US authorities have begun an effort to ban all forms of internet gambling, reversing course from a 2011 decision and imperiling a burgeoning online wagering sector in several American states.

Online betting for casino and other games, which has been growing in the United States, could be shut down under a new legal opinion from the Department of Justice (AFP / MANILA BULLETIN)

Online betting for casino and other games, which has been growing in the United States, could be shut down under a new legal opinion from the Department of Justice (AFP / MANILA BULLETIN)

The Justice Department earlier this month released a legal opinion stating that any form of online betting, not just sports betting, would be a violation of the federal Wire Act.

That could shut down online poker, casino and lottery offerings launched in a handful of states since a 2011 decision by the Obama administration to refrain from prosecuting any online betting that is not sports-related.

“It could have a signficant impact but it will depend on whether the DoJ strictly enforces its new interpretation,” said Jennifer Roberts, associate director of the International Center for Gaming Regulation at the University of Nevada-Las Vegas.

Roberts said a very strict interpretation could shut down fantasy sports leagues that have grown in recent years and potentially any online wagering even if confined to a single state where betting is legal.

“Even if the betting takes place in a jurisdiction where it’s legal, if the communication is routed into another state that could trigger the Wire Act,” Roberts told AFP.

The Wire Act is a 1961 law that bars the use of telecommunications for gambling as part of an effort to crack down on organized crime.

Since the 2011 interpretation, various forms of online gambling have begun in Nevada, Delaware, New Jersey and Pennsylvania, with a handful of other states considering legalization.

While there is no comprehensive breakdown of US online gambling revenues, total wagers were up near 22 percent to $298 million last year in New Jersey, which has the largest internet segment.

90-day window

In the latest opinion, the Justice Department stopped short of indicating how far it would go in enforcement. But in a January 15 memo, deputy attorney general Rod Rosenstein said prosecutions could begin after 90 days.

“A 90-day window will give businesses that relied on the 2011 … opinion time to bring their operations into compliance with federal law,” Rosenstein said.

“This is an internal exercise of prosecutorial discretion; it is not a safe harbor for violations of the Wire Act.”

For many years, online gambling was opposed by the US casino industry, but recently some traditional gaming operators have joined the move to internet wagering.

Casino operators including Caesars Entertainment and Golden Nugget now take online bets where legally allowed, making it as easy to wager as tapping on a smartphone.

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