Congratulations, American gamblers: You'll probably be able to place bets on the internet again soon, thanks to a big retreat by the Justice Department that leaves most online gaming decisions to the states.

The feds reversed their earlier interpretation of the Wire Act of 1961, in which they held that the act prohibited all forms of internet gambling in the U.S. The Justice Department has now written, in response to requests for clarification from New York and Illinois, that it believes the Wire Act only forbids online sports betting, and that states can legalize online gambling within their own borders. Some experts believe that states could even enter into compacts with one another to allow interstate online gambling. "This is quite a Christmas present... it's really a major decision," a Whittier law professor told the New York Times.

But don't expect a comeback for the likes of Full-Tilt Poker any time soon: The first result of this decision will be state governments setting up their own online betting operations and replenishing their depleted bank accounts with the proceeds. New York already has an online gambling system written and ready to go, and plans to soon add two jackpot games, Powerball and Sweet Million. Good luck breaking up that profitable monopoly, startups.

[via BetaBeat]