By Renee | January 21, 2012

The recent re-interpretation of the 1961 Wire Act on the part of the US Department of Justice (DoJ) has opened the floodgate of opportunities for individual states to license and run online poker sites even before the online poker industry is legalized at the federal level.

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Over six US states, including the District of Columbia and Nevada, have created regulatory frameworks for online poker so that online poker services can be launched within their territories. US states that already run lotteries can venture in the world of online poker. However, the subject is being hotly debated by online gaming lawyers and financial analysts.

The DoJ’s recent announcement threw the entire online poker community in an optimistic mood. They felt that federal legalization of the online poker industry is just round the corner, but Andrew Zarnett, the gaming analyst at Deutsche Bank, said: “We do not feel it provides clarity that the Department of Justice has softened its stance on all Internet gaming.”

Jennifer Carleton, a gaming lawyer from Las Vegas, has warned poker players can the DoJ can withdraw its statements at any moment. While stating that the DoJ’s latest interpretation of the law has opened opportunities for individual US states to offer online poker within their territories, she also said, “Gaming practitioners and entrepreneurs interested in Internet gaming must remain alert, attentive and proactive during the period of rapid legislative and regulatory changes that is likely to follow.”

Mark Lipparelli, the chairman of the Nevada Gaming Control Board, feels that opinions need to be analyzed further and that one cannot jump to conclusions right now.

Clearly, the Congress has not made any positive move towards legalizing the online poker industry, with two bills proposed legalized gaming still pending. Instead, the focus has now shifted to state-wise regulation of the industry. Speaking on the trend, Zarnett said: “Already some states are working hard to prepare for-profit online gaming. It is clearer now that not-for-profit state lotteries will be involved, maybe even have a first-mover advantage.”

While Michael Gaughan, the owner of South Point, opines that state-wise legalization would not be lucrative because of small player pools, Mark Hichar, a lawyer in Boston, suggests that states can join other states to increase the size of their player pools as DoJ doesn’t prevent this.

In brief, state-wise legalization has indeed become a reality, but there are a number of issues that still need to be sorted out.

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