Online gambling 101: What the new gambling expansion means for states

Online lotto – and virtual slot machines, blackjack, and poker – could be coming to your state or one near you. The US Department of Justice announced late last year it was reversing its previously held position that all Internet gambling was illegal, clearing the way for a potential boom in online gambling. Proponents call it a windfall for flagging state budgets. Opponents ask, 'At what cost?' Here are answers to five key questions.

1. So, gambling online is legal now?

Photo illustration BY Ann Hermes/staff
A look at an online gambling site hosted in Britain, where such sites are legal.

Not so fast. The Department of Justice's decision itself doesn't automatically give a green light to Internet gambling. Since gambling is regulated at the state level, states must now approach their legislatures if they want to legalize online gambling within the state. It's also important to remember that the DOJ decision doesn't carry the authority of, say, a US Supreme Court ruling, and can be reversed at any time, says Frank Fahrenkopf.

"I don't think that based upon the DOJ decision, states are given an automatic imprimatur," says Mr. Fahrenkopf, chief executive officer of the American Gaming Association, a Washington, D.C.-based casino industry trade group. "The DOJ decision leaves open a lot of questions.… It creates more confusion than clarity."

For example, does the ruling mean states can offer more than lottery tickets to include games like Internet bingo, blackjack, and poker? Must the players and operators be within state lines or can states assemble Powerball-like interstate poker? The DOJ has been asked to specify.

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