A new opinion dated from September but only revealed to the public last Friday

reinterprets an old law which could clear the way for many on-line gambling sites to prosper, bringing to the government much needed tax revenues.

Wire Act Forbids Online Gambling

Under what is called the “Wire Act” of 1961 all forms of internet gambling was deemed illegal and could land the operators of such websites with fines and/or jail time facing civil and/or criminal charges. The act forbids wagers made through telecommunication which cross state lines or extend over international borders.

Only for Sporting Events

This Friday it was announced that the Justice Department’s Office of Legal Counsel under the Obama administration has a new interpretation of the Wire Act, stating that the law only applies to bets made on a “sporting event or a contest,” and does not apply to the state’s use of the internet to sell state lottery tickets to adults within its own borders or abroad.

“The United States Department of Justice has given the online gaming community a big, big present,” said I. Nelson Rose, a gaming law expert at Whittier Law School who consults for governments and the industry.

The question arose when the states of Illinois and New York wanted to know if the sale of their own state’s lottery tickets violated the provisions of the Wire Act.

Now Its Legal?

But the conclusion written by Assistant Attorney General Virginia Seitz would nevertheless eliminate “almost every federal anti-gambling law that could apply to gaming that is legal under state laws,” Rose wrote on his blog at www.gamblingandthelaw.com.

“The ordinary meaning of the phrase ‘sporting event or contest’ does not encompass lotteries,” Seitz wrote. “Accordingly, we conclude that the proposed lotteries are not within the prohibitions of the Wire Act.”