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States Consider Internet Gambling; 2006 Law Is Murky on Legality

Posted Aug 15, 2011 10:40 AM CDT
By Debra Cassens Weiss

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Cash-strapped states are considering Internet gambling, though it’s not clear if the U.S. Justice Department will raise objections.

Washington, D.C., already legalized Internet gambling in a budget bill last year that became law when Congress did not object, the Associated Press reports. Now the District is moving ahead with plans to create an online gambling site to allow residents to play casino-style games, according to the New York Times.

The Justice Department has shut down offshore gambling websites and arrested their executives when they traveled to the United States, the Times says. Now Sen. Majority Leader Harry Reid of Nevada and Sen. Minority Whip Jon Kyl of Arizona have written a letter (PDF) asking the department to reiterate its position against online intrastate gambling.

Lawyer Mark Hichar of Edwards, Angell, Palmer & Dodge says a 2006 Internet gaming law seems to carve out an exception for states to run online games. But the legislative history says the bill is not intended to amend existing law. The language could mean that a prior law still applies that bans wagering over interstate communications systems. “The legislative history is a real head-scratcher,” Hichar tells the Times.

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