Justice Department Ruling Could Allow for Multistate Online Poker

With the recent encouraging developments in the ongoing efforts to regulate online poker in the United States, a new possibility has begun gaining momentum among lawmakers: an interstate online poker compact that would allow players from various states to compete with each other on the online felt.

The idea follows a critical opinion from the Justice Department that came down in December. In that opinion, the Department of Justice clarified just how the government should interpret the Wire Act. The law, which specifically mentions banning sports betting over the phone (and can be reasonably interpreted to expand to other forms of "remote" gambling, such as placing bets via the internet), has also been used to justify banning nearly all forms of online gambling, including casino games and poker.

But the new opinion pointed out that the syntax of the bill had been manipulated to allow for this interpretation. The Justice Department opinion stated that even the portions of the bill that didn't specifically refer to sports betting clearly were meant only to pertain to that form of gambling, and thus, the entire act should only apply to bets on sporting events.

This clarification meant that there was no particular statute outlawing the play of online poker in the United States at the federal level. This was the signal many lawmakers believed was necessary before states would feel comfortable legalizing online poker for residents.

But for many states, the prospects for successful online poker sites seem limited. In smaller states, the player pool could be very small, meaning that only a limited number of games might be able to run, and off-peak hours might see little or no participation at all.

One solution that has begun to gain momentum in some states is the idea of multistate poker compacts. Under these compacts, players from multiple states would be able to play at the same sites, with states dividing the revenues from the sites.

Most lawmakers feel that such proposals would pass muster. As an example, they point to the Powerball and Mega Millions jackpots, which are jointly administered by the lottery programs of multiple states.