Justice Dept to Stenehjem Internet poker bill illegal

The U.S. Justice Department has told Attorney General Wayne Stenehjem it believes a proposal to license Internet poker sites violates federal law. The legislation's sponsor, Fargo Rep. Jim Kasper, called the agency's opinion a "hollow threat."

The letter, signed by Laura Parsky, a deputy assistant attorney general in the Justice Department's criminal division, does not specifically address North Dakota's proposed law, but repeats the agency's belief that federal law "prohibits gambling over the Internet, including casino-style gambling."

Parsky's letter lists three federal laws that may apply, which are known as the Wire Act, the Travel Act and the Anti-Gambling Act.

Stenehjem said the letter makes clear that North Dakota would be headed for a legal confrontation with the federal government if the Internet poker licensing measure is approved.

"At one point or another, we are going to be, if this law is passed, in court, in a very protracted and potentially expensive lawsuit to defend the statute," Stenehjem said. "Before I would be willing ... to establish an Internet gaming program in North Dakota, I would have to have a ruling from a court indicating that in doing so, we're not violating (federal law)."

For the state Internet poker licensing law to take effect, North Dakotans also would have to approve a constitutional amendment to exempt the game from the constitution's broad prohibition against gambling.

The amendment has been approved by the House, and should the Senate follow suit, the amendment would go on North Dakota's ballot in June 2006.

Kasper said Friday he didn't believe the Justice Department letter was "any big deal. It is just their opinion. It was expected."

"I'm not very concerned at all," he said. "It shouldn't stop the bill from moving forward ... That's the way they play the game, with intimidation and hollow threats."

Kasper said he forwarded the letter to attorneys with expertise in gambling law to get their responses on whether the federal laws cited in the letter apply to Internet poker.

At a Senate Judiciary hearing earlier this week, three lawyers who favored the measure emphasized a federal appeals court ruling that concluded one of the laws, the Wire Act, covered Internet sports betting but not Internet gambling in general.

Kasper's legislation would authorize the attorney general to license and regulate Internet poker sites that are located in the state. It includes taxes on the companies' revenues, and a $10 annual registration fee for players, which the companies would be obliged to pay.

The Judiciary Committee's chairman, Sen. Jack Traynor, R-Devils Lake, said the panel expects to consider amendments to the bill next week.

Stenehjem has requested extensive changes, to regulate who may be licensed as an Internet poker site operator, and to spell out actions the attorney general may take to oversee conduct of the game. Traynor said some changes may affect the Justice Department's opinion of the legislation.

"They're citing various laws and their interpretation of those laws," Traynor said of the agency's letter. "I think it will have some influence. I don't think it will be a determining factor."

The bill is HB1509. The amendment is HCR3035.

By DALE WETZEL, Associated Press Writer

News Added: 12 March, 2005

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