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Why Online Gambling in the US is Legally Confusing?


When one thinks of gambling, it is impossible not to think about the Mecca of gambling — Las Vegas. The Sin City, as Las Vegas is referred to by many, is home to the world’s top casinos. These casinos are mostly located on the Strip and are places where poker, craps and blackjack tables, together with thousands of slot machines, reign supreme.

The old school land-based casinos are now getting serious competition from their online versions that let players indulge in their favorite casino games with just a couple of clicks on the computer.

This rise in online gambling and gaming is what has left both legislators and people asking questions about their legality. Even though gambling per se is not illegal in most parts of the US, its online counterpart might not be that lucky, which has lead to a vague position it now occupies.

Online gambling is a popular phenomenon accepted and regulated in the majority of Europe, which makes it even weirder that a country like the US that has always been a leader in technology and social freedom doesn’t back this pastime.

However, it is the laws in the US that make online gambling regulations obscure and in need of enlightening, as it is presented in the following article.

Is Online Gambling Legal in the First Place?

The regulation of online gambling falls under the jurisdiction of federal laws and the federal government. The law says that online gambling is entirely legal as there are no specific laws that prohibit it, so it is up to individual states to determine how they want to regulate it.

A significant concern about the legality of online gambling has to do with the Federal Wire Act that explicitly prohibits the use of wire communication for the interstate or foreign transmission of bets and wagers on sporting events and contests. However, in 2011, the US Department of Justice released a statement to the public noting that the ban relates solely to sports betting, only to reverse their opinion in November 2018 which claims all forms of online gambling are included in the wire act.

Following several lawsuits from national lotteries of Georgia and Tennessee and a series of contradictory verdicts on the matter, the Justice Department has put their opinion on hold, and the government is said to be reviewing the case.

An attempt to shed more light on the matter was made by the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) that probably made things ever so dubious. Namely, the legislation prohibits gambling businesses from intentionally accepting payments which are connected to 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.

The key here is in the part that bans accepting the money but does not say anything about sending the money, which led to the flourishing of offshore casinos who have the best of the situation. All in all, this act does not strictly ban online gambling, although it had made things a lot more difficult for legitimate operators.

The Legality of Sports Betting

The biggest obstacle to sports betting at online casinos has been “The Professional and Amateur Sports Protection Act of 1992”, also known as PASPA or the Bradley Act. PASPA act aimed at outlawing sports betting activities in all parts of the US. However, the states of Nevada, Oregon, Delaware, and Montana were exempt from the decision under a specific clause.

Not wanting to let things die out quietly, the New Jersey governor Chris Christie put up a legal fight in an attempt to turn sports betting in New Jersey statutory. His fight was not in vain and it was even joined by a Murphy v. National Collegiate Athletic Association case where the Supreme Court of the United States ruled in 2018 that PASPA is in conflict with the Tenth Amendment and therefore unconstitutional.

Since that moment on, many states have rolled out sports betting, and many more are expected to follow as the profit range is too big to be overlooked and not taxed. The online gambling has turned into a billion-dollar industry, and a lot of that money won’t feel the state’s coffers unless taxed, so it is no wonder why more and more states would search for a way to legalize sports betting.

What’s the Case with Online Casinos?

The situation with online casinos and their games is a bit different than the one with online sportsbooks. At the moment, four states have legalized any form of online casinos. The legal standpoint for online casinos and states is connected to the type of casino games offered by these online operators.

Namely, states such as New Jersey and Pennsylvania took their chances in the current power vacuum before any final decisions by the Department of Justice are declared, and legalized both online casinos and online poker games. The states of Nevada and Delaware have legalized online poker, meaning you can freely access online poker sites from their territories.

New Jersey has been an absolute leader of online casinos in the US ever since they passed online gambling laws in 2013. New Jersey is a breeding ground for casinos that offer a myriad of slots, blackjack, poker and roulette games with exceptional themes and playing features. Also, you can opt for other more exotic games at their casinos, such as bingo, keno, scratchcards, and live dealer games. Taking a leaf from New Jersey’s book is Atlantic City, so we can expect this city to be added to the list of states with legal online casinos.

Are Things Going to Clarify?

The clarification process of the legality of online casinos and sportsbooks is underway, and it is expected that the lawmakers will promptly come up with clear guidance and solutions. By then, it is worth noting that online gambling in the US is legal and that forms of sports betting and online casinos are available in various states mentioned here. On the other hand, most Americans choose to gamble in offshore online casinos and inadvertently be in violation with the law, but no one has ever been punished for such code and law violation until the time when the instructions and regulations for online gambling are unequivocal.

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