Gambling Online In The Us: The Laws & Regulations

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There is without a doubt that online gambling has become a huge industry. Although the lockdowns due to the COVID-19 pandemic contributed a lot to its growth in 2020, online casinos and online sports betting apps have long been seeing steady and increasing player count and revenue throughout the years. The United States is a vast and widely diverse market, that there are gamblers from the country that is from all genders, races, and on all socio-economic levels. In addition to that, the country also boasts of one of the biggest and most iconic gambling places in the world–Las Vegas. But despite all of these, did you know that the gambling laws in the United States are hazy, and sometimes even confusing?

For the most part, online gambling in the US is not considered an outlawed activity. However, there are certain laws–both old and more crescent ones–that made gambling in the country a bit tricky, especially for owners and bookmakers.

Here are some of them.

The Wire Act of 1961

Although this law was drafted and passed way before even the internet has been invented, it has been repeatedly used to invoke multiple “violations” related to online gambling. Although the original purpose of the law was to help US states and territories to better regulate gambling activity in their area, a certain section has been used to invoke against online gambling. It reads:

“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 in 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.”

Interstate Transportation of Wagering Paraphernalia Act

This is yet another 1961 law. In simpler terms, this law aimed to make the transportation of paraphernalia, ticket, any printed paperwork, or electronic device to be used in bookmaking and sports betting.

Although it is also passed way before online gambling, to “transport” files, documents, and messages, also applies to electronic means, like email or online file transfer.

UIGEA

Unlike the two laws on the top, the Unlawful Internet Gambling Act aims to protect the players from casino owners. Unlike the Federal Wire Act, this law does not prohibit gambling but rather sets rules and regulations to prevent casino owners from committing money laundering, fraud, and other money-related crimes.

Professional and Amateur Sports Protection Act

This law has one purpose: to outright ban online sports betting. PASPA has one exemption to this rule though: A select few sports like pari-mutuel horse racing and dog racing are exempted from the prohibition to betting.

Illegal Gambling Business Act

This is another law that does not target players and prohibits gambling activity. Rather, the Illegal Gambling Business Act aims to ensure that any gambling business or establishment is not being used as a front to hide an organized crime.

Varying state laws

Have you wondered why some states in the US have stricter gambling laws, while some are more open to it? This is because each state has the power and right to implement its gambling laws.

For example, among other states, sports betting is legal in New York but is illegal–both in-person and online–in the state of Texas.