Just before Christmas, the United States Department of Justice issued an opinion clarifying that the Wire Act of 1961 only applies to sports betting. Seemingly, other activities, specifically online lottery sales and potentially online poker, are above board as they relate to the 50-year-old statute. We’ve had a ton of questions from the online poker community about what the DOJ’s clarification means in the short-term and long-term, so PocketFives caught up with Poker Players Alliance(PPA) Executive Director John Pappas to get them answered. Join the discussion on our Poker Community thread.

PocketFives: Given the DOJ’s stance on the Wire Act, can you tell us about the applicability of the UIGEA? Could online poker still violate the 2006 law?

John Pappas: That’s a big question mark today. There are still things that the UIGEA would cover in a state where it’s clearly illegal to offer internet poker. The things related to bank fraud and miscoding transactions would still be illegal under the UIGEA even if poker were allowable in a state. The UIGEA is still, from a banking enforcement standpoint, applicable. But, we’ve always argued that the UIGEA didn’t change any laws as they relate to poker. At this point, there’s just no clear-cut answer.

PocketFives: Why was the DOJ’s opinion, which was written in September, not released until December?

John Pappas: It’s hard to say, political timing maybe. The administration works in mysterious ways. I feel like they were going to wait until it was the right time. We’ve been hearing rumors of this letter for months, so we anticipated something would come out. It certainly could be an attempt to bury it by releasing it close to Christmas, but the news media has grabbed onto the story anyway.

PocketFives: Does this shed new light on, or undermine, any of the DOJ’s actions like Blue Monday and Black Friday? Was the money taken from online poker rooms done without merit?

John Pappas: On Blue Monday and Black Friday, it’s difficult to say because the Wire Act was never invoked. But, there are companies and individuals who plead guilty to illegal gambling under the Wire Act and forfeited hundreds of millions of dollars, namely Anurag Dikshit of PartyPoker. That site was offering non-sports betting activities, so it seems that some people have forfeited a lot of money. Now, the DOJ has said that what they were doing was not illegal under the Wire Act.

PocketFives: Is there a possibility that poker could be considered a “sporting event or contest”under the Wire Act?

John Pappas: I don’t know. One of the key determinants of the prohibition in the Wire Act is betting on a sporting event. If I were betting on the WSOP, then that could violate the Wire Act. But, if I am in the WSOP and playing, I am not violating anything. I think it would be very difficult for the Federal Government to make that argument.

PocketFives: Does this ruling permit interstate online poker, or are we likely looking at only intrastate online poker?

John Pappas: I don’t think it’ll permit anything without a state authorizing it explicitly and we’ll see some states coming forward to do that soon. I think it would be limited to an intrastate basis. There are competing legal opinions out there about interstate poker, one of which is that Congress would have to approve interstate internet commerce. Others say that’s not needed, so it’ll be interesting to see how it unfolds. This ruling gives state the confidence to move forward with intrastate internet poker.

PocketFives: Is the Merge Gaming Networkcurrently serving U.S. customers legally?

John Pappas: I think it’d be difficult to say that they’re violating the Wire Act unless they’re taking play from states that clearly prohibit it. However, anyone who continues to operate in the U.S. post-Black Friday without a license is running at a very high risk. That will be the case until Congress or states actually start issuing licenses.

I have a hard time believing that prosecutors or others might turn a blind eye to sites still in the U.S. market. It may not be Federal prosecutors that go after sites, either. It could be state prosecutors.

PocketFives: What do you think the timeline is for states and the Federal Government to actnow that the Wire Act has seemingly been clarified?

John Pappas: For states, it has to be pretty soon, partly because many state legislatures only meet for a limited amount of time and typically, they’re frontloaded at the beginning of the year. I think you’ll see all of the states that have been out there pushing for legislation try to act in the early part of the year. I also believe that efforts at the Federal level are going to increase as well. There are a number of lawmakers that feel like it is time for Congress to step in.

PocketFives: Can states that have prohibited online poker reverse their stance now?

John Pappas: Yes. At any point, a state can reverse course and allow for expanded gaming. It really depends on the state, though, in terms of how easy it is to do so. Sometimes it takes a Constitutional amendment.