US U-turn over online gambling?

There could be good news for the Isle of Man's booming online gaming industry at the start of 2012.

The United States Justice Department appears to have reversed half a century of policy, so that states can legalise online gambling.

The decision was made by the department in September, but only published just before Christmas.

It could be a positive move for the Island's net gaming sector, with the Isle of Man-based Global Betting and Gaming Consultancy estimating online gaming business grew to around $30 billion in 2011, an increase of nearly twelve per cent from 2010.

In what looks to be a U-turn on online and 'wire' gambling, a new interpretation of law is being offered that may make it legal for states to authorise online gambling. If that happened the federal government would have to go along with it.

A report on the digital trends website states: '...the option, to use out-of-state transaction processors to sell in-state lottery tickets, finds that interstate wire communications that do not relate to a sporting event or contest fall outside the reach of 1961's Wire Act, which barred wagers placed across state lines using telecommunications.'

The Wire Act has been the basis for making online gambling illegal in the United States, and the subsequent Unlawful Internet Gambling Act of 2006 has been used to pursue and prosecute operators of online poker sites.

Following the apparent change of heart, if individual states legalised intra-state games like poker, which some states have already done, the Wire Act could not be applied against the games' operators.