USA Online Gambling Laws

Online gambling law in the United States is very complex. It is considered often contradictory and sometimes inconsistent. Major laws in the US allow states the ability to establish their own gambling controls and laws. Some states have chosen to authorize some online gambling, while others have chosen to allow none, and the scope of what is allowed varies widely by state. For this reason, it is necessary that players make an effort to know and understand the local gambling laws before they begin placing bets. Even if you engage in online gambling without fully knowledge of your local laws, you may find yourself in very serious trouble if caught doing so.

State Regulations

Each state decides how it regulates internet gambling. While some states chose to operate in a vacuum, others have entered agreements with other states to regulate online gambling, especially those states that offer state lottery gaming. In many states, gambling is an essential source of revenue, and the expansion of gambling to internet gambling has been viewed as a natural and safe growth area. Most states allowing gambling have legalized a diverse array of gambling options, many more than are available in land-based casinos. Maryland is home to sites that offer poker-making games, while New Jersey has widely legalized casino games at various online sites.

Federal Laws

Federal law in the United States is not friendly to online gambling. The federal Wire Act of 1961 forbids the use of wired communications to conduct gambling within the US and also across state lines. The Wire Act was originally designed to thwart the major organized crime syndicates of the time from extorting bets on sports. It has been used in recent years primarily as a tool to enforce the prohibition against internet gambling, ferreting out major operations.

State Regulations

Because gambling activities are primarily considered a state relationship, the regulation and legalization of gambling are primarily within the states’ purview. In the United States, states have the power to determine gambling law and policy in their respective jurisdictions. Each of the 50 states has its own gambling laws and regulations. Although many states have passed laws prohibiting online gaming operators or players from engaging in online gaming, several states have legalized it, while others are considering the move. In addition, some states have amended their state constitutions to allow certain types of gambling, under specified conditions. Generally, both the act of gambling as well as the act of running an online gambling business are illegal unless specifically permitted by a state law. The state statutes will specifically articulate what types of gambling activities can be engaged in and what types of gambling entities can engage in these activities. State statutes and regulations also typically cover gambling licensing, tax collection, and consumer protection provisions. State agencies typically have the broadest powers of enforcement and day-to-day regulation, including the authority to license and regulate both gambling operators and gambling players. Gambling regulation and licensing is typically handled by agencies or departments separate from general revenue collections. In addition to the establishment of a coherent regulatory structure, some states also address the potential impact of illegally operated offshore gambling websites. These laws often provide stiff penalties, but similar to federal attempts at enforcement, state actions are usually ineffective. Only one state has had success in this area, and there have been only a handful of prosecutions following states’ attempts to close online gambling websites that operate illegally.

Federal Laws

The legislation that halted the initial growth of internet gambling came in the form of the Wire Act of 1961. Prior to the advent of the internet, gambling has always been somewhat hard to regulate due to the factor of operation across state lines, and the Wire Act effectively stated that any company accepting bets for sporting events across state lines was breaking federal law. So while states maintain the right to regulate gambling, the Wire Act and its associated laws are what the Federal government uses to intervene on gambling activities within states.

However, in recent years, the position of the Federal government regarding these laws has shifted. An association representing the interests of casino owners with a stake in state licensing issues favors a Federal licensing framework and strict regulation. Their argument is that the reputation of the gambling industry is in jeopardy if these regulations are not enforced. After all, the gambling industry faces stigma in many circles due to the possibility of activity behind the scenes. In remote gambling settings, however, such as the internet, a lack of regulation can leave the door wide open for mob-run companies or offshore interests looking to separate tourists from their cash or worse. Since with the click of a mouse all these underground companies are a mere card flip away and they face little or no repercussion since they are not subject to US laws.

Licensing Requirements

While USA online gambling law is primarily state law, the issue of licensing and regulation of the gambling businesses is a subset of this state law. Although there is no federal opt-in procedure through which a state could set a licensing procedure for inter-state gambling, any state which wishes to exercise intrastate regulatory powers must pass a licensing and regulatory statute. Several states moving towards widespread legal online gambling must shortly address the issue of how such businesses will be licensed and regulated. Recent online gambling laws contain few specifics about this very important part of regulating these businesses.

State statutes that legalize online gambling typically do not address licensing procedures. As a starting point for these businesses, the states might simply permit licenses for the racetracks and casinos already operating in the state. However, because these businesses now operate in a regulated environment, it is likely that they will resist the move into unregulated or self-regulated online gambling. Existing casinos, already scrutinized by regulatory agencies and also having large databases of customers might be better able to monitor online gambling operations. Some have already released their own legal online gambling sites. Additionally, states might allow as a condition of a license statute the use of only the individuals and businesses which already operate casinos in the state.

Beyond the regulated casino and racetrack businesses is the broader gambling market that has developed in the USA. Parties that have been operating in the quasi-legal gray market area may seek to participate in the legal market through licensing systems. The question then becomes should there be wide-open procedures for these entities as likely state lottery operators or should the states subject them to the same procedures that they currently require of lottery operators who make only limited amounts of money.

Online Gambling Associations

If you want to find more information about a gambling site, all you have to do is look at its footprint at associations who take and track complaints. If you are still unsure about a site’s reputation, you can follow reviews we compiled for you in our separate section.

Established in London in 2003, eCommerce Online Gaming Regulation and Assurance is one of the first independent testing agencies for the online gambling industry. It is a well-known figure in the business and was involved in creating some result certifying standards for certified companies and is also available to the public for giving advice. As a standard, it favors players’ interests and is a resource for questions or complaints lodged on certified betting and casino sites. The key areas for which the agency acts as an arbiter are responsible gambling, fair play, and protection of players’ funds. Their seal is present on current sites.

The iGaming Solutions is dedicated to enhancing best practices, and sustainable innovation, and driving further support for the industry. They are all about building knowledge and trust between End Users and iGaming including Affiliates, Media, Software Providers, and Operators by addressing dichotomy collaboration. They develop the iGAMING NGO Legal and Regulatory Framework. They work with stakeholders from different disciplines: lawmakers, lawyers, operators, and law enforcement.

The Virtual Global Taskforce is an alliance of international law enforcement agencies and private sector partners working together and seeking to strengthen efforts to protect children from child sexual exploitation online. It is involved in making poor quality gaming and gambling products or services less marketable and is the first step in regards to fighting illegal online gambling.