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US Justice Department Cracks Down on Online Gambling


Gambling aficionados will have a hard time satisfying their habit as the US Justice Department strengthens its rules against online gambling and lottery.

The DOJ’s Office of Legal Counsel states that the 1961 law Wire Act applies to the interstate casino and online poker games, not just sports betting. The DOJ gives businesses 90 days to adjust operations to the new regulations, but the department remains confident that the new ruling will receive an appeal in court.

A department official adds that the DOJ’s priority with the rule change is to pressure conduct on gambling activities that have possible ties to criminal schemes.

Billionaire and Las Vegas Sands Corporation CEO Sheldon Adelson thinks of the strict gambling implementation as good news. Adelson, also a generous Republican donor, reveals that his gaming company and resort employed five lobbying companies during the third quarter of the past year, and two lobbied on the implementation. Adelson states that he spent well over $250,000 during that quarter.

Eilers & Krejcik gambling industry strategist Chris Grove reveals that the rule change will not affect online gaming businesses that have offshore accounts in Antigua or Costa Rica but may see small-time casinos and online state lotteries will need to make some adjustments.

The gambling regulation can also become a problematic ordeal for New Jersey, Delaware, and Nevada, all states whose economy includes the profit of online poker and different forms of sports betting. The Nevada Gaming Control Board is reviewing the DOJ’s regulation to anticipate its consequences, while Delaware and New Jersey have yet to respond.

The Wire Act’s purpose is only to apply the limits to sports betting, making it hard for sports gambling to move freely like casinos. The Supreme Court allows states to regulate and tax sports betting companies on their own, which allows games that are waging to develop state by state for its market to grow.

During 2011, the DOJ discovered that the Wire Act did not reach casino games. The act only prohibits transmissions of wagering with casino games. Daniel Wallach, University of New Hampshire Law School sports wagering director, reveals that the regulation will lead to challenges. Judging by state lotteries and the number of states that allow internet gambling, Wallach says that the list of plaintiffs can be extensive.

Aaron Swerdlow, an associate of the Glaser Weil Fink Howard Avchen & Shapiro LLP, expects numerous challenges in court. Swerdlow believes that there is too much money at stake and that both sides have active players that will move to get what they want or maintain what they have.