Casino News: California Online Gaming memo causes confusion

In the Sunshine State of California, a recent US Department of Justice memo is causing confusion. Although some say it is giving the go-ahead for the potential commencement of online gambling, others say the battle has barely begun. The memo clarifies the 1961 Wire Act -- a federal law containing a prohibition against online gaming. However, this only applies to bets on sporting events. Optimists are interpreting the memo as the opening of legal floodgates, which could pave the way for the acceptance of other varieties of Internet gaming, poker included.

Sacramento attorney Howard Dickstein, an expert on jurisdictional and tribal gaming matters says, “I think most of us assumed that the Wire Act did not apply to intrastate Internet gaming, but this confirms it. And it also provides California with the opportunity apart from what the federal government decides to do with Internet gaming to enter into agreements with other states to increase the market, the liquidity, and viability of state authorized Internet gaming.”

Although the memo clarifies the notoriously ambiguous legal status of inter and intrastate online gambling, states still must adhere to a strict licensing framework. In California, this has been a major challenge in the past several years. And although pressing, the future of California gambling is way down the list of federal priorities.

David Quintana, of  the California Tribal Business Alliance says “In three years of discussing Internet gaming in California this issue has come up maybe once or twice. Clarifying this issue and its effect on the ability of the bill getting passed or not is the equivalent of saying whether a race car that has leather or vinyl seats is going to win the race.”

Questions must be asked -- who will operate the online gaming sites? Racetracks, card rooms, or tribes? Or even advance deposit-wagering companies? Watch this space for more news on the issue as it happens.