Will Online Poker Actually Be Legal?

An opinion published by the Justice Department's Office of Legal Counsel a week ago today may be the opening that online poker needs to become a reality. The opinion says that the 1961 Wire Act makes online betting on sporting events illegal, not games like poker.

The news has sent shares of Bwin.Party, a pure play on online gaming that is traded in London, 25% higher this week.

But what does it really mean for the future of online poker?

Opinion vs. a court ruling
An opinion by the Justice Department isn't a court ruling and doesn't define the law. It can be overturned by a new president or a court. So the opinion in and of itself doesn't mean a whole lot. But it may lead to action in the legislature. The opinion will at least put some pressure on the legislature to define the rules, which are murky at best right now.

A few days ago, I pointed out that during 2011, bipartisan support emerged for online poker regulation, and there's really no good reason Congress shouldn't be able to hammer out a solution. As it is right now, online poker is an underground business that's nearly impossible to control, and it could provide a needed source of both state and federal revenue.

An industry push is coming
MGM Resorts (NYSE: MGM  ) , Wynn Resorts (Nasdaq: WYNN  ) , and Boyd Gaming (NYSE: BYD  ) have all formed partnerships in the online gaming world in the hopes that some regulation will be passed. Almost everyone except Las Vegas Sands (NYSE: LVS  ) CEO Sheldon Adelson is for online gaming, which would generate millions in profits for operators.

If some sort of legislation is enacted in the near future, there's no doubt that Caesars Entertainment and MGM Resorts would be major beneficiaries. They have some of the most well-known brands in gaming and have the infrastructure to offer the most rewards to players. But don't forget about Boyd Gaming, which was shrewd to partner with Bwin.Party and MGM on a joint venture. The company only owns 10% of the venture, but that's probably more than it could have generated on its own.

Interested in reading more about gaming stocks? Add your favorites to My Watchlist, which will find all of our Foolish analysis on this stock.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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