LegalGamblingUSA.com - Online Gaming Laws

USA Online Gambling Laws

Though online gambling in the USA had gone unregulated for a number of years, the USA online gambling laws have been solidified as of 2006. For an industry that has its roots in 1995, it took quite some time for the government to write some laws pertaining to the industry. When it came down to have these laws actually set up, they became a source of great confusion for the player.

The legality of online gambling in the United States comes down to the federal versus the state implementation of the laws. By working from the bottom up, you will look at the state side first. State laws are more specific, and these are what have had the greatest impact on the player. Few states have written laws pertaining to online gambling, so this is not always a problem. There are some very broad laws on the federal level, but these laws are also open to some interpretation that has led many legal minds, gambling enthusiasts and outside observers to form their own opinions on what is legal or illegal.

Federal Online Gambling Laws

There are currently two major federal laws pertaining to online gambling - the Wire Act of 1961 and the more current Unlawful Internet Gambling Enforcement Act of 2006. The Wire Act was written back in the 60's in order to combat racketeering and organized crime, while the Unlawful Internet Gambling Enforcement Act was attached to the SAFE Port Act in an almost surreptitious manner. There are main points to take from each of these laws, and they are as follows:

Wire Act of 1961

The Wire Act of 1961 states that "whoever being engaged in the business of betting or wagering knowingly uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting the placing of bets or wagers on any sporting event or contest, or for the transmission of a wire communication which entitles the recipient to receive money or credit as a result of bets or wagers, or for information assisting in the placing of bets or wagers, shall be fined under this title or imprisoned not more than two years, or both.

UIGEA - Unlawful Internet Gambling Enforcement Act

The Unlawful Internet Gambling Enforcement Act, as per the Department of Treasury, "prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law."

If you read these two laws, it is somewhat difficult to really see what is legal or what is illegal. The Wire Act only really placed its ban on sports betting, while the Unlawful Internet Gambling Enforcement Act, which was sneaked in on a port security act, had made it so the financial portion of online gambling had become somewhat more difficult. As such, depositing into and withdrawing from your gambling account had become somewhat more difficult.

Whether or not either of these laws could be used against the player has been a subject of great debate. Both laws also have their own caveats in terms of online gambling. Courts have determined that the Wire Act is only valid with sports betting, leaving online poker and online casinos unaffected by the legislation (one of the main reasons why you are seeing states begin to sell lottery tickets online + launch their own forms of legalized online gaming).

The UIGEA has been challenged on numerous occasions, with some stating that it is unconstitutional and more of a law that should be left up to the states. This has led courts to decide that the UIGEA would be up to the states to enforce, so each state can decide whether or not online gambling is legal on an intrastate basis.

There have been many consequences due to these laws, including a mass migration of some gambling companies out of the United States, as well as several essential deposit options. The industry of online poker has been targeted above any other, though online sportsbooks had also been chipped away.

Though we have not heard of a player who has been arrested for online gambling, these laws are definitely food for thought. Legislators are working toward repealing the UIGEA or making sure the Wire Act would not tamper with the online gambling industry, but little progress has been made. With the World Trade Organization stepping in and a need of new sources of revenue, it is not entirely unlikely that these laws will change.

PASPA - Professional And Amateur Sports Protection Act

The Professional and Amateur Sports Protection act of 1992 (Bradley Act) essentially banned sports betting in the United States with exceptions to several states. The most notable exception to this law is obviously the sportsbooks in Las Vegas, Nevada. This law gave states that already had licensed casinos the chance to to put a law through their state to allow sports betting.

The states included under PASPA include: Nevada, Delaware, Oregon + Montana

This was one of the first strong stands behind gambling on sports in the United States, but before the Internet craze and online sports betting. Since then. other laws like the Unlawful Internet Gambling Enforcement Act of 2006 has sought to ban online transactions with the explicit intent for betting on sports.

Related Article: Is Online Sports Betting Legal In The U.S.

Online Gambling Laws At The State-Level

Some states are taking matters into their own hands when it comes to creating online gambling legislation that would allow for it to be played legally, and under the regulation of the government. This is because these states view online gambling as having positive benefits when implemented and regulated properly, specifically when it comes to an economic impact on the state. There are three states in particular that we want to address on this topic, because they are spearheading this move towards the legalization and regulation of online gaming within the United States. They are Nevada, New Jersey, and Delaware, all of which have legislation passed, or are in the process of being implemented for forms of legal online gaming.

Beginning with Nevada, it's an obvious choice to start because of the state hosting arguably the most popular gambling destination in the entire world in Las Vegas. But what Assembly Bill 114 has to do with doesn't relate only to the city of Las Vegas, but the state of Nevada on the whole. This bill, which was passed in April of 2013, allows for forms of online poker to be legalized and played by those living and visiting in the state.

Not only does AB 114 legalized forms of online poker, but it also opens up the potential to interact with other states in the future who choose to do down this path as well, creating an interstate path where states that choose to legalized online poker will be able to play at these regulated sites within Nevada. AB 114 also leaves room for the expansion of online gaming into other areas outside of poker, due to the ambiguity of the language within the bill itself under the term 'interactive gaming.'

In the case of New Jersey, the legalized online gaming if far more broad. In fact, bill A-2578, which was signed by Governor Chris Christie early in 2013, will allow for all online casino games that can be found at any of the state's Atlantic City casinos to be legalized and regulated on the Internet. This not only includes all the casino games, but it also includes online poker, which is predicted to be the most popular of the games that will be offered. Essentially, these would be online versions of the Atlantic City casinos.

Economic estimates for online gaming in New Jersey expect $1.5 billion in growth, to go along with $150 million in tax revenue each year, as reported by various studies conducted for the project. This bill is for a 10-year trial period, for which Governor Christie hopes that it will provide a great boost to the state. In addition to that, other states with an interest in online gaming will no doubt be looking to New Jersey to see how it pans out for this state. A successful stint could lead to more states inquiring and choosing to pass legislation along the same lines.

When one thinks of gambling in the U.S., Delaware might not come to mind, but it should. In fact, Delaware was the first before Nevada and New Jersey to form and implement online gaming legislation, outside of poker. It was HB 333, also known as the Delaware Gaming Competitiveness Act of 2012, which was passed by the Delaware State House and signed by Governor Jack Markell.

Such games like slots, roulette, blackjack, and poker are available to those within the borders of Delaware, one of the smallest states in the United States. Legalized gambling is only available at the approved Delaware casino sites as well, for which there are currently three. The Department of Finance conducted a study for the Delaware online gaming project, with estimates of $7.75 million in revenue to be generated during the 2013 fiscal year.

Current Gambling Statutes Going Through Congress

HR 1174 - Internet Gambling Regulation Protection Enforcement Act

HR 2230 - Internet Gambling Regulation Tax Enforcement Act

HR 2366 - Internet Gambling Prohibition Poker Protection UIGEA Strengthening Act