Gambling has been a popular pastime for thousands of years, but since the dawn of the digital age, it has made a huge leap forward. Today, you do not have to visit the casino or show up for a horse race to place wagers. You can gamble online from the comfort of your own home!
However, simply because online gambling is accessible everywhere does not mean it is legal everywhere. The United States has tried to uphold high standards in its online gambling sector. Many laws are in place to protect players, casinos, or even bookmakers from exploitation.
State legislators have spearheaded the drive to approve online casino gambling, but federal attempts have been considerably more difficult to advance. Several important federal statutes allow states to embrace internet gaming, but other provisions of these same laws continue to be significant barriers for those who wish to gamble online.
Here is an overview of these Federal laws that impact online casino gambling in the US. Read on to learn more!
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Unlawful Internet Gambling Enforcement Act (UIGEA)
The UIGEA also holds a significant influence on online gambling in the US. Adopted as a last-ditch by anti-gambling campaigners as part of an unconnected port security measure, UIGEA prohibits gaming organizations from collecting payments from another person for online gambling.
Although the UIGEA makes processing payments harder, it does not outrightly prevent these transactions. Payment processors can still accept bets in states where real-money online gambling is legally authorized.
Still, this law essentially halted the online poker boom of the early 21st century. Authorities used the act as a reason for a crackdown on real-money online poker on what is known as “Black Friday” in the gaming community.
The statute expressly prohibited payments from fantasy sports and pari-mutuel horse racing, both permitted to run across state lines. Thankfully, it does not prohibit states from legalizing online casino games like blackjack, online slots, and poker, even though payment processors cannot operate across state lines.
Since the enactment of UIGEA, only a few states have legalized these games, and while they can create interstate compacts to pool participants, their availability remains severely limited. Only Pennsylvania, West Virginia, Delaware, and Nevada have legalized online poker. Real-money online casino games are only legal in Delaware, New Jersey, West Virginia, and Pennsylvania.
Other states, including South Dakota, are yet to legalize any form of online gambling. Hopefully, in the years to come, online casinos in South Dakota will become a reality; See Now.
Interstate Wire Act
The Interstate Wire Act, often known as the Federal Wire Act, is one of the most important gaming laws in the United States. Although it was signed before the commercialization of the Internet, it is still used to govern online gambling.
Passed by the Kennedy administration to combat organized crime, this law expressly prohibits the transmission (or “wiring”) of information and payments related to sports betting across state boundaries.
Nonetheless, the language of the Wire Act is frequently confusing, which has led to controversy over its interpretation. According to the Court of Appeals, The Wire Act is only applicable to real money online sports betting and not online casino games.
However, the Supreme Court has yet to make a ruling on this law, which prompted the Department of Justice to declare that it applies to all forms of online gambling.
It is worth noting, though, that while the Wire Act has been in effect for almost 60 years, no American has been convicted under the Wire Act for gambling online. The FBI has clarified that large-scale operations are their main priority rather than individual bettors.
Professional and Amateur Sports Protection Act (PASPA)
What was previously a key federal legislation is no longer in effect. PAPSA prohibited practically all forms of sports betting in the United States, outside of Nevada.
Unlike the Wire Act, which prohibited the transfer of sports betting money and information over state lines, PASPA was much stricter. PASPA prohibited any state (save Nevada) from accepting bets on individual game sports online or in person.
Since the repeal of PASPA, sports betting, including online sports betting, has skyrocketed in the US, with more than 19 states legalizing it, and many others set to follow suit.
Travel Act
The Travel Act was enacted to address illegal activities and organized crime that involve interstate travel or using interstate facilities. This law prohibits using interstate commerce, be it telephone, Internet, or mail, to run, manage, or promote illegal activities, which may include online gambling.
However, how this act applies to online gambling can be complicated and varies based on the specific circumstances and intentions of the parties involved.
Final Thoughts
The Federal government has a huge influence on the state of online casino gambling in the US. Some of the laws set in place are a bit confusing and controversial, but it is unlikely they will change anytime soon.However, the states’ current capacity to approve these games is unlikely to be jeopardized. That creates a constantly developing American market, one that will continue to grow for years.
