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Published January 04, 2012, 05:21 PM

Legal Opinion May Revive ND Internet Poker

BISMARCK, N.D. (AP) — A state lawmaker who unsuccessfully pushed Internet poker licensing in North Dakota said Wednesday he has no plans to revive the proposal after a new U.S. Justice Department legal opinion concluded the gambling would not violate federal law.

By: Dale Wetzel, Associated Press

BISMARCK, N.D. (AP) — A state lawmaker who unsuccessfully pushed Internet poker licensing in North Dakota said Wednesday he has no plans to revive the proposal after a new U.S. Justice Department legal opinion concluded the gambling would not violate federal law.

Rep. Jim Kasper, R-Fargo, believes Justice Department opposition to his poker licensing measure helped derail it in the 2005 Legislature. After it squeaked through the North Dakota House, it was overwhelmingly defeated in the Senate.

The agency, in a letter to North Dakota Attorney General Wayne Stenehjem, said at the time that it believed federal law barred Internet gambling, including casino-style gambling.

But a new agency opinion, made public late last month, says one of the key federal laws wielded against Internet gambling — called the Wire Act — applies only to sports betting.

Kasper and attorneys sympathetic to his cause made similar arguments six years ago, bolstered by a federal appeals court ruling that concluded the Wire Act's reach was limited.

The new Justice Department opinion "pretty much says that (Internet poker regulation) is entirely up to the states," said I. Nelson Rose, a gambling law expert and professor at Whittier Law School in Costa Mesa, Calif.

Internet gambling within a state, or between states, "now does not have any federal restrictions ... so long as the bettor and the operator are in states, or countries, where it is legal," Rose said in a telephone interview.

Kasper said Wednesday he was unsure whether the Legislature would take up the issue again.

He is up for re-election this fall and said he's "just worried about getting endorsed and getting re-elected, and not about issues like that."

"I am not talking about promoting (Internet poker), and I have not made any decision to do anything at all," Kasper said. "Whether I do anything or not in the next session, I have no idea."

If the Internet poker debate is resurrected, North Dakota would be likely to face competition elsewhere. Nevada and the District of Columbia have recently made Internet poker legal, and other states may follow suit.

"The Internet is kind of like dog years. Everything is faster," Rose said. "Within one decade, we will have almost all of the states having at least Internet poker, and probably other forms of Internet gambling."

Kasper's original legislation put the attorney general's office in charge of regulating Internet poker sites that agreed to pay a $50,000 application fee, $25,000 annual license renewal fees and $10 per player. The Bank of North Dakota was envisioned as the repository for players' money.

The measure imposed a graduated tax on sites' revenues, from 8 percent for the first $1 million to 0.25 percent for sums greater than $58 million. Most of the tax proceeds were to be transferred to counties and school districts to reduce property tax rates.

The new Justice Department opinion was issued to respond to questions about whether the states of New York and Illinois could use the Internet to sell lottery tickets to their own residents.

Until now, the agency had concluded the Wire Act barred intrastate gambling if a transaction used processors or Internet facilities outside the state. The new opinion says the law does not bar Internet lottery ticket sales because they don't involve sports betting.

"The text of the Wire Act and the relevant legislative materials support our conclusion that the act's prohibitions relate solely to sports-related gambling activities," the opinion says.

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