Federal Law Online Gambling
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On Jan. 14, 2019, the news broke that the Department of Justice’s Office of Legal Counsel (OLC) had issued a new legal opinion on the Wire Act. The Wire Act of 1961 did not just apply to sports betting.
Speak to an attorney right now about gambling debts, online gambling and illegal gambling. A gaming lawyer is ready to provide important legal advice.
But in 2011, the DOJ issued an opinion that the act was limited to sports betting.
The 2011 opinion led directly to the introduction of state-regulated online lotteries, online poker and online casino games. The revised opinion appeared to throw the legality of state-regulated online gambling into doubt.
The issue remains unresolved and has already led to Pennsylvania’s licensed casinos delaying their launch of online gambling until — at the earliest — July.
The Wire Act of 1961
The text of the Federal Wire Act begins:
“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.”
The issue at hand is the DOJ’s interpretation that the text applies not just to sports betting but all betting.
The big shutdown of online poker on April 15, 2011, was based on this interpretation. The day, deemed as “Black Friday,” saw PokerStarsand Full Tilt domains seized by the DOJ, although the actual charges were based on breaches of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.
On July 31, 2012, the government dismissed “with prejudice” all civil complaints against all PokerStars and Full Tilt poker companies.
The dismissal was part of a settlement in which PokerStars agreed to buy Full Tilt. PokerStars and Full Tilt admitted no wrongdoing as part of the settlement. As a result, no court has tested the applicability of the Wire Act to internet gambling.
The DOJ opinion of 2011 and the lottery
The IC3 is an online tool which allows the public to report tips about suspected online criminal activity, including within the illegal gambling sector. This initiative also leverages the IC3. The term “unlawful Internet gambling” shall not include any activity that is allowed under the Interstate Horseracing Act of 1978(15 U.S.C. (ii)Rule of construction regarding preemption.— Nothing in this subchapter may be construed to preempt any Statelaw prohibiting gambling.
In September 2011, the DOJ released an opinion on the Wire Act that stated;
“interstate transmissions of wire communications that do not relate to a ‘sporting event or contest’ fall outside the reach of the Wire Act.”
The opinion came in response to requests from Illinoisand New York for guidance on whether the Wire Act prohibited sales of lottery tickets online.
The DOJ concluded:
“Because the proposed New York and Illinois lottery proposals do not involve wagering on sporting events or contests the Wire Act does not, in our view, prohibit them.”
The new opinion had far-reaching consequences. It meant that the Wire Act also did not apply to online casino or online poker games.
On April 30, 2013, online poker launched in Nevada. Shortly after, online poker and casino launched in Delawareand New Jersey. Pennsylvania became the fourth state to legalize both activities in 2017, although no online sites have yet launched.
The DOJ replacement opinion of 2018
In a document dated Nov. 2, 2018 — but was not released until January — stated that the DOJ issued a replacement opinion on the Wire Act that largely reversed its position:
“Having been asked to reconsider, we now conclude that the statutory prohibitions are not uniformly limited to gambling on sporting events or contests. Only the second prohibition of the first clause of section 1084(a), which criminalizes transmitting “information assisting in the placing of bets or wagers on any sporting event or contest,” is so limited. The other prohibitions apply to non-sports related betting or wagering that satisfy the other elements of section 1084(a).”
The DOJ opinion was in response to a request from the Criminal Division. The DOJ bases its revised opinion on a plain text reading of the law:
“While the Wire Act is not a model of artful drafting, we conclude that the words of the statute are sufficiently clear and that all but one of its prohibitions sweep beyond sports gambling.”
The opinion itself is not law. However, it is the DOJ’s interpretation of the law that determines whether or not it will initiate prosecutions.
Potential consequences of the new Wire Act reversal
Four main risks are arising from the new DOJ opinion:
- Any internet gambling that crosses state boundaries may be illegal. This applies to major lottery promotions, such as the Powerball, and interstate poker games authorized under interstate compacts.
- In-state online gambling could be illegal if any of the internet data used crosses state boundaries.
- Operators and regulators could take a cautious approach to the interpretation. This might result in delaying the implementation of existing laws, or postponing or canceling planned legislation. Any successful prosecution by the DOJ on the basis of its new opinion could exacerbate this possibility.
- Online payment processing for online gambling transactions could be illegal if internet data crosses state boundaries.
In a statement issued immediately after the new opinion became public, the American Gaming Association (AGA) minimized the potential impact:
“It is unfortunate that the Department of Justice departed from well-established practice in reversing its previous opinion without a compelling reason to do so. However, the 2018 OLC opinion does not impact the ability for states and tribes to legalize and regulate gaming on a state-by-state and tribal basis, or for companies to provide the exciting products and entertainment experiences our customers want.”
The current situation remains one of legal uncertainty. US Deputy Attorney General Rod Rosensteinissued a memo explaining that the DOJ was giving operators 90 days to change what they needed to comply with the new opinion.
At the end of February, the news broke that the DOJ was extending that window by another 60 days.
An opinion politically motivated by Sheldon Adelson?
Revising an opinion is not usual practice for the DOJ. The government department prides itself on providing business with certainty and stability in its approach to enforcing federal law.
This unusual reversal gave rise to suspicions that the new opinion was actually the result of political lobbying by casino mogul Sheldon Adelson, a long-time opponent of online gambling.
In testimony to the House Judiciary Committee, Acting US Attorney General Matthew Whitaker testified that he had no involvement in the revised opinion. When pressed on whether Adelson was involved, Whitaker said that he had personally never met him, adding:
“So, I think it is very consistent, and your inferences on how that process was corrupted or corrupt is absolutely wrong. And the premise of your question I reject.”
Legal opinions on the new Wire Act opinion
There are already court rulings on the meaning of the language in the Wire Act. Several lower courts have relevant rulings, but the most important in terms of judicial precedent is from the 5th Circuit.
Contrary to the DOJ’s new opinion, the 5th Circuit ruled in 2002 in “In re: Mastercard” that:
“the Wire Act does not prohibit non-sports internet gambling.”
Legal opinions on the DOJ’s opinion have come from far and wide:
Ifrah Law says the new opinion will have a chilling effect
Jessica Feil of Ifrah Law PLLCsaid the opinion could have “far-reaching impacts,” and that its full reach remains to be seen:
“This opinion may have a chilling effect on state lawmakers that were otherwise looking to follow in the footsteps of New Jersey and Pennsylvania by legalizing online gaming. Further, many lotteries have been incorporating online and mobile products and now those plans may be cast into doubt. However, as we have seen with online sports betting — which has always been subject to the Wire Act — there are viable, fully intrastate solutions for online gaming.”
Absurd language
Scott Balber, the managing partner of Herbert Smith Freehills‘ New York office and the US head of investigations and financial services litigation, pointed out that the DOJ opinion appears to contradict Supreme Court rulings on plain language.
“The 2018 opinion goes on to cite Supreme Court precedent to support the proposition that where statutory language is clear, only an absurdity that no reasonable person could intend should negate its plain interpretation (the “Absurdity Standard”).
However, the Absurdity Standard is only applicable “where (absurdity is) the result of applying the plain language” of the statute. Public Citizen v. United States Dept of Justice, 491 U.S. 440 (1989).”
Internet data accidentally crossing state borders
Anthony Cabot, a distinguished fellow in gaming law at UNLV, gave his take on the subject to Online Poker Report:
“The 2018 DOJ opinion insinuated that the federal Wire Act prevents all state-authorized and regulated online gambling by interpreting that transmitting sports wagers in interstate commerce also bans bets where both the bettor and the sports book operator are in the same state.
A theory exists that any communication over modern telecommunication including digital telephone systems and the internet is considered interstate even where the sender and receiver are in the same state if the transmission was incidentally routed across state lines.
To avoid prosecution, the sportsbook operator would have to prove that not only were the sender and receiver in the same state but that the transmission could not have been incidentally routed across state lines. This could be very problematic.”
Cabot argued that this interpretation was fundamentally wrong:
“The term “interstate commerce,” is a defined term in the federal code that contains the Wire Act and “includes commerce between one State, Territory, Possession, or the District of Columbia and another State, Territory, Possession, or the District of Columbia.” I do not believe that if the sender and receiver of a wager are in the same state that the commerce is between states.”
Cabot also thought that the DOJ would lose when the issue comes to court.
“The new DOJ opinion strains logic to reinterpret the meaning of “bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest” to apply to wagers other than sports.”
Inconsistent legal analysis
John Holden, J.D., Ph.D., said that the analysis presented in the new opinion was inconsistent. He argued that DOJ analyzed the different parts of the opinion on different legal bases.
“One intriguing feature of the opinion: It appears as though the author knows a fact and could easily resort to the legislative history contained in associated hearings or congressional reports, but chooses not to do so.”
He sees the analysis of the language as:
“tormented efforts to find a means of interpreting the statute that renders a meaning distinct from the plain text of the statute.”
This one will go all the way
Daniel Wallach, of Wallach Legal LLC and co-founding director of the University of New Hampshire School of Law’s Sports Wagering and Integrity Program, said that he could see the case going all the way:
“The opinion acknowledges that the decision will likely be tested judicially. I think we could be headed toward the next big gambling case that reaches the Supreme Court, or at the very minimum, the U.S. Court of Appeals.”
Payment processing is at risk
Tommy Shepherd, an attorney with Jones Walker in Jackson, Mississippi, said the DOJ opinion could extend to payment compliance.
“There are many concerns with the reversal of the years-old DOJ position. A significant concern for the states and their gaming revenue is payment processing… . Will the banks, and other payment processors, be leery of providing the means to facilitate the movement of money through website wagering and mobile app betting?”
Daily fantasy sports unaffected
Joe Brennan Jr. spoke about the new opinion to USBets. He was the director of the Interactive Media Entertainment & Gaming Association (iMEGA) and is the co-founder of SportAD. He pointed out that daily fantasy sports (DFS) should be completely unaffected:
“DFS is unaffected, because it’s granted a specific exemption under the UIGEA law, where Congress has drawn a line between what is defined as sports betting and what is defined as fantasy sports. DFS is actually the least affected by this. So, the only thing that really seems to have been immediately affected, at least from a legal sense, is poker. What it will affect on a more informal basis, how it will affect other stakeholders, that’s what remains to be seen.”
Pennsylvania’s immediate reaction to the new opinion
The Pennsylvania Gaming Control Board (PGCB) almost immediately sent a letter to all its licensed casinos setting out its position on the new opinion. The letter said that all would go on as planned with the rollout of sports betting and online gaming. There will need to be some amendments to accommodate the new opinion.
In particular, the PGCB directed licensees to submit a plan of how they would personally comply with the new opinion. This was especially with respect to keeping data inside the state:
“The opinion does not, however, negate the premise that “intrastate” activity as provided for by state law is permitted. Thus, with any forms of internet or mobile gambling, it appears that diligence in assuring that the transmission of bets and wagers, payments and credits as a result of bets or wagers, as well as the information assisting in placing those bets and wagers (subject to § 1084(b)), does not cross state lines is paramount.”
The impact was immediate. Operators planning to establish game servers outside the state have changed plans to locate them within Pennsylvania. The result is that online gaming will not now begin until July 1 at the earliest.
New Jersey’s reaction to the Wire Act reversal
New Jersey Senate President Stephen Sweeney almost immediately asked the DOJ to rescind its new opinion. He said that if the DOJ did not walk back the opinion, New Jersey would take the DOJ to court.
In a letter to Deputy Attorney General Rosenstein, Sweeney explained why the opinion was incorrect:
“The 2019 opinion, which took 26 pages of tortured analysis of sentence structure and comma placements to determine that the clear language of the Wire Act applied to all forms of gambling, was contrary to the much better reasoned opinion of the 5th Circuit and the “thorough review” of the Department of Justice in 2011.”
He ended:
“If the OLC 2019 Wire Act opinion is not rescinded, I have authorized former Sen. Raymond Lesniak to file suit in US District Court on behalf of the New Jersey Senate for a declaratory judgment that the 2019 OLC Opinion is arbitrary and capricious and that the statutory prohibitions of the Wire Act are uniformly limited to gambling on sporting events or contests.”
Attorney generals of NJ, PA issue letter to DOJ
On Feb. 5, Attorneys General Gurbir Grewal (NJ) and Josh Shapiro (PA) reinforced Sweeney’s view. They wrote to the DOJ stating:
“DOJ’s latest reversal is wrong, and it undermines the values of federalism and reliance that our states count on. We request that you withdraw the OLC opinion or, in the alternative, guarantee that DOJ will not bring enforcement actions against companies in our states that are acting lawfully under state statutes.”
Nevada’s reaction
America’s great gaming state of Nevada threw its weight into the debate. Nevada Congresswoman Dina Titusissued a statement as soon as the new opinion was published:
“Though the full impact of this reckless DOJ reversal remains to be seen, we can be certain that it will inject uncertainty into a well-regulated market and push consumers back into the black market. Unfortunately, the Trump Administration only supports states’ rights when it is politically convenient. Despite this setback, I will continue to lead the fight in Congress to ensure states like Nevada can decide what is best for them on the question of online gaming.”
New Hampshire reacts
Charles McIntyre, the executive director of the New Hampshire lottery, suggested that the state could lose millions of dollars as the result of the new opinion:
“Certainly at the very narrowest interpretation we are looking at $4 million to $6 million this year and $6 million to $8 million next year, as this represents what we are selling now through the internet online channel.”
Massachusetts reacts
MassachusettsTreasurer Deborah Goldberg decided to spend time with the congressional delegation to discuss the impact of the new Wire Act opinion. She is pushing for a Massachusetts online lottery and sees millions of dollars at risk.
“This issue will be part of our discussions with the legislature as they tackle sports betting and online lottery this session. We are taking a proactive approach and working with the attorney general’s office and meeting with congressional members during the NAST Legislative Conference to address the implications of this opinion.”
Lotteries react
The North American Association of State and Provincial Lotteries (NASPL) issued a statement on Feb. 4 reinforcing the gaming state opinions:
“DOJ’s reinterpretation of the Wire Act creates substantial uncertainty concerning the legal status of lottery transactions, including these critical enhancements and improvements, many of which were made in reliance on the 2011 opinion, and the related contractual obligations and the industry’s ability to provide critically needed funding for important public interests.”
The cross-state competitions such as the Powerball are massive money earners for the state lotteries that participate. The losses to state income from lotteries are massively greater than those from restricted interstate online poker.
Gambling opponents react
On behalf of the Coalition to Stop Internet Gambling (CSIG) the former senator of Arkansas, Blanche Lincoln,applauded the new opinion:
“Today’s decision seamlessly aligns with the department’s longstanding position that federal law prohibits all forms of internet gambling, as well as with Congress’s intent when it gave law enforcement additional tools to shut down the activity through the overwhelmingly-passed Unlawful Internet Gambling Enforcement Act in 2006.”
Federal Law Online Gambling
The legal challenges begin with New Hampshire
Only a few days after Sweeney threatened legal action, New Hampshirefiled its own legal challenge.
In “the New Hampshire Lottery Commission v William Barr,” the lottery demanded an injunction against the DOJ. It wants the judge toorder the DOJ not to enforce its own opinion.
The NH Lottery’s technology supplier NeoPollard has filed an almost identical case, which states:
“As a result of the OLC’s erroneous change in position, gaming activities long thought to be lawful are now under threat of imminent criminal and civil prosecution. This includes not only making lottery products available to consumers for purchase via personal computers and mobile devices, but also traditional lottery sales via brick-and-mortar retail sales agents.”
Gov. Chris Sununu completely supports the challenge. In a statement he said:
“Today, New Hampshire is taking action to protect public education in New Hampshire. The opinion issued by DOJ puts millions of dollars of funding at risk, and we have a responsibility to stand up for our students.”
New Hampshire is part of the 1st Circuit’s jurisdiction. Usefully, the 1st circuit has already ruled that the Wire Act does not extend outside sports betting.
In the case US v Lyons, the 1st Circuit explained:
“In this manner, the Wire Act prohibits interstate gambling without criminalizing lawful intrastate gambling or prohibiting the transmission of data needed to enable intrastate gambling on events held in other states if gambling in both states on such events is lawful.”
The industry trade group iDEAGrowth has now joined the two lottery business lawsuits. Attorney Jeff Ifrah commented:
“We trust that the New Hampshire Court will give appropriate weight to judicial precedent over political factors in making its decision, a decision sure to have a major impact on a fast-growing industry poised to offer significant economic benefits to states across the country.”
New Jersey, Michigan and Pennsylvania add support with amicus briefs
On March 8, New Jersey, Michiganand Pennsylvania joined the legal challenge launched by the New Hampshire Lottery. Both New Jersey and Michigan filed amicus briefs supporting the NH Lottery.
An amicus brief is a brief filed by a “friend” of the court — amicus is the Latin word for friend. Almost anyone can file one.
It is superficially at least, an honest effort to help the court come to a judgment. Amicus briefs highlight issues the sender thinks the court should take into consideration.
New Jersey wants the new opinion ‘null and void’
The New Jersey brief asks for a complete reversal of the DOJ’s new opinion:
“Furthermore, this court can and should grant relief that reaches beyond the parties and the District of New Hampshire, and that protects the interests of third-parties like New Jersey nationwide. Under the Declaratory Judgment Act, the Court should declare that the Wire Act does not cover non-sports-related gambling in any jurisdiction, and under the Administrative Procedure Act, the Court should vacate the DOJ’s 2018 reinterpretation of the Wire Act as null and void.”
Other lottery states sign Michigan’s brief
The Michigan amicus brief comes directly from the Michigan state lottery. But many other state lotteries have also signed the brief:
- Kentucky Lottery Corporation
- Tennessee Education Lottery Corporation
- Virginia Lottery
- Rhode Island Lottery
- Colorado State Lottery Division
- North Carolina Education Lottery
- Delaware
The Michigan brief argues that the DOJ’s opinion is just plain wrong
“The proposed amicus brief is useful and relevant to the Court’s review for two primary reasons: it emphasizes the erroneous nature of the 2018 opinion’s legal conclusions and it demonstrates the need for nationwide equitable relief to combat the 2018 opinion’s nationwide consequences.
The brief will explain that the DOJ’s 2018 opinion is inconsistent with the statute’s language and legislative history and contradicts decisions by the 1st and 5th Circuit Courts of Appeals interpreting the Wire Act to apply only to sports gambling.”
Pennsylvania says the opinion is ‘contrary to the plain meaning of the Wire Act’
Pennsylvania’s motion came as an “intervenor” in the form of an emergency motion from the state Department of Revenue. It argued similarly to the others that the DOJ has got its opinion legally wrong.
“The Pennsylvania Lottery agrees with plaintiffs that the OLC’s reversal of its 2011 opinion regarding the scope of the Wire Act, 18 U.S.C. § 1084, is arbitrary, contrary to the plain meaning of the Wire Act, and inconsistent with directly applicable precedent.”
However, on Monday, March 11, Judge Paul Barbadoro ruled the intervention invalid. According to the judge, the case did not involve Pennsylvania law. Pennsylvania will follow up with its own Amicus brief in the next few days.
There is one bright light from the legal challenge. The court at least recognized the urgency of the case and set it on an expedited schedule. This means that appeals and the long process of getting a final ruling can begin soon.
New Hampshire rules against the DOJ
Later, on June 3, Judge Barbadoro issued his ruling, and it was not good news for the DOJ.
“I hereby declare that § 1084(a) of the Wire Act, 18 U.S.C. § 1084(a), applies only to transmissions related to bets or wagers on a sporting event or contest. The 2018 OLC Opinion is set aside.”
Before dancing a victory celebration, the judge restricted his ruling to the plaintiffs in the case. This means that the New Hampshire and Michigan lottery provider Neopollard can continue online lottery. But it also means that the case isn’t decided legally for the rest of the country.
The DOJ can also appeal the decision.
What is worrying is that the judge was unable to determine the plain text meaning of the law.
“While the syntax employed by the Wire Act’s drafters does not suffice to answer whether § 1084(a) is limited to sports gambling, a careful contextual reading of the Wire Act as a whole reveals that the narrower construction proposed by the 2011 OLC Opinion represents the better reading.”
This looks very much like the judge has used his discretion to make a ruling based on contextual factors. Such a ruling is very open to challenge. It’s a ruling that may not be replicated in other circuit courts around the US.
The first battle is a triumph for the gaming states. As to whether the final victors will be the DOJ or the states, that question remains open.
In the United States, both the Federal government and individual state governments are responsible for regulating gaming within their jurisdiction. The Federal government has designated some forms of gambling as prohibited within the US and has created laws that are non-negotiable in the regulation of such prohibited activities. On this subject, the Federal government may outlaw any form of gambling and states must abide by their law as Federal regulation will always trump state laws. It is important to any country’s gambling laws in order to stay within the country’s legal guidelines.
Federal Law Regarding Online Gambling
States, however, are permitted to maintain their own regulations and prohibitions on acceptable forms of gambling as dictated by Federal regulations. So long as state laws align and do not challenge or disobey Federal gaming laws they are free to control, oversee, and manage to gamble within their state. Usually, states create and employ gaming control boards or special gaming commissions to supervise gambling activities within their state borders. State laws are subject to their specific state and do not have jurisdiction or power to control laws in other states. Therefore, gambling laws can differ greatly between states.
Active Federal Laws And Regulations In The United States That Affect Online Gambling
The United States maintains several significant federal gambling laws that greatly affect how gambling is regulated and permitted throughout the nation. Each law provides its own in-depth explanation, reasoning, and history behind its creation and implementation. On this page we summarize the laws, however, to gain a comprehensive understanding of the background of each federal law simply follow the highlighted links to resource guide that provides a greater depth of explanation.
Federal Wire Act – To combat prolific organized crime surrounding illegal bookmaking, then President John F. Kennedy enacted this law which effectively outlawed betting businesses from using phones to accept, place, or transmit interstate or foreign wagers on sports. At the time, this federal law greatly minimized domestic mafia bookmaking operations. The law has recently been interpreted by the US Department of Justice as effectively prohibiting U.S. based online sportsbooks from operating within the nation’s borders. Therefore it is a crime to operate an online sportsbook on US soil. The law does not prohibit USA residents from engaging in online sports betting at a legitimately licensed and regulated sportsbook that is legally operating outside of the United States.
DOJ Formal Opinion – In 2011, the DOJ and the Office of Legal Counsel released a memo that explained their formal interpretation of the Federal Wire Act that countered against the previous position the Criminal Division of the DOJ had taken. The memo stated that their prohibition on US-based Internet gaming only applied to online sports wagering. This clarification effectively allowed U.S. states to determine their destiny regarding online gambling as long as it doesn’t entail betting on sports. Therefore online casinos and poker sites are now legally permissible should a state decide to legalize these forms of betting entertainment.
UIGEA – This federal law is specifically aimed at online gaming operators and online gaming payment processors to curb illegal financial crimes, fraud, and money laundering through internet gaming activities. Financial institutions were thus barred from permitting direct transactions to online gaming service providers and given specific regulations on how they may process such transactions. In essence, the law provides regulatory oversight regarding how the online gambling transactions of USA residents are processed. The law does not make online gambling illegal.
PASPA – Once acted as the governing law over the prohibition of brick and mortar sports wagering throughout the US, with the exception of four exempted states. These four states had already implemented some type of active sports wagering or had pending sports legislation in place by a specified deadline and therefore were deemed exempt from the restrictions enacted by PASPA. The exemption was also offered to New Jersey due to their thriving Atlantic City gambling entertainment market, however, the state failed to take advantage of this option and allowed the deadline to pass. However, in 2018 SCOTUS reviewed PASPA and on May 14th ruled it unconstitutional and void. This law is no longer effctive in the land of the free.
RAWA – A preemptive bill yet decided upon intends to rewrite the Federal Wire Act of 1961 to extend prohibitions to include all forms of online gaming. If passed, this law would violently impact the current and future USA online gambling market as it does not include carve-outs for existing state-regulated online gambling platforms such as those initiated in Delaware, New Jersey, and Nevada – effectively making all online gaming in the USA illegal immediately.
State Gambling Laws
Federal Law Against Online Gambling
Individual states maintain the authority to allow or prohibit any form of gambling within their borders that are not expressly prohibited by US federal gambling laws. Due to the differing climate of states and their individual positions regarding legal forms of gambling entertainment, it is crucial to provide up to date information on what each US state permits and forbids in order to deliver the most accurate information for our readers. Therefore, we have specialized state focused pages to deliver the most current information on gaming laws and permissible gaming entertainment within their borders. Not only that, we provide here a state-specific gambling entertainment bill tracker to keep Americans updated on upcoming legal forms of betting entertainment in their state and inform them of newly enacted or retracted gambling laws.
Who Regulates Gambling in The United States?
At the federal level, there are multiple agencies that have a say in the regulation of U.S.A. gambling, these figures include the Department of Justice, the Federal Bureau of Investigation, the US Supreme Court, the House of Representatives, Congress, and even the President. All of whom communicate with one another and utilize the US constitution and precedent laws to determine the eligibility and legality of pending gambling legislation and regulations. At the state level, senators and congressmen in government positions lobby, direct, and discuss possible gaming legislation to either generate, permit, and regulate various legal forms of gaming entertainment in their state.
However, state governments often create sanctioned oversight boards such as Gaming Control Boards or Gaming Commissions to authorize, supervise and regulate legalized gambling activities within their state. Certain states in the USA may only have limited forms of legal gaming and therefore consolidate administrative power to existing commissions such as Lottery Commissions that are then tasked to regulate lotteries and limited forms of gambling such as charitable gaming in this case.
Forms of Legal Gambling in The United States
There are a variety of legal forms of gambling within the United States, however, these permitted venues are not uniform across state lines and players interested in engaging in these activities should check with local state laws to ensure lawful participation. As identified by the American Gaming Association the following forms of gaming entertainment are legal in the US: brick and mortar commercial casinos, tribal-run casinos, public and private poker rooms, bingo halls, various charitable gambling venues offering games such as raffles, pull-tabs, paddlewheel, punchboards, and casino nights, table games, on-track and off-track pari-mutuel wagering on horse racing, exotic wagering, bookmaking, daily fantasy sports tournaments, skill-based tournaments such as billiards, darts, and fishing, and lotteries.
Forms of Legal Online Gambling in The United States
Within the U.S.A. there are legal forms of online gambling that citizens may participate in, however again, the permissibility of online wagering is not equal across state borders as individual states hold the authority to allow or prohibit various types of online gambling for their state residents. With this being said, a number of US states have permitted the legalization of online gaming platforms through the use of iGaming services providing online casino, poker and lottery initiatives that are thriving. As of this writing, Delaware, New Jersey, and Nevada all have state-based online poker available, and both Delaware and New Jersey also offer state-regulated online casino gambling as well.
At this moment in time, individual states are not eligible to provide state-regulated sports betting online due to current federal legislation blocking such access. Regardless, nearly all USA residents may participate in legally licensed and regulated offshore online sports betting sites that remain a legal online avenue for USA players.
What Is The Legal U.S. Gambling Age?
Generally, gambling is legally accessible to individuals above the age of eighteen. However, every state has its own laws on the minimum legal age for gambling within their borders and often it can vary by game type. Normally, lottery gambling, charitable gambling, parimutuel wagering and bingo are available to young adults who are at least eighteen. Often times poker and casino gambling impose a requirement for individuals to be at least twenty-one in order to participate. These norms vary by state.
Federal Law And Online Gambling
What Happens If I Violate A US Gambling Law?
Nearly all states criminalize gambling in some form and contain various penalties and punishments set for engaging in illegal forms of gambling. Violations of any US gambling laws, whether federal or state, can lead to imprisonment, hefty fines, and/or probation. Each violation case is different, and penalties vastly change based on the state or jurisdiction the violation took place in and circumstance. Imprisonment can vary based on a misdemeanor or felony offense in which case can result in up to a year in county or local jail for misdemeanors and a year or more in prison for felony offenses.
Online Gambling Federal Law
Criminal cases involving organized crime and professional gambling can result in up to a 10-year sentence in federal prison or more. Fines can vary on a state by state basis, generally, misdemeanor fines can range from $100 up to a $1,000 or more. Felony fees are relatively handled the same way and they can reach up to $20,000 or more. Fines can be separate punishments or in addition to jail or prison sentences. Probation sentences often ask offenders to serve 12 or more months either in a gambling addiction treatment facility or refraining from participating in gambling activities alongside with judge recommendations for community service or similar.
Is Illegal Gambling a Problem in the United States?
In the past, illegal gambling rings were run by threatening mobster figures who would often commit violent crimes against individuals and families of persons with unpaid debts. Today, the seedy dark figures of the past are no longer so prevalent but that is not to say that there are no underground gambling activities taking place in the US. In fact, several cases of violent threats and acts occur to this day due to gamblers placing wagers and falling into debt with the wrong type of individuals.
Illegal gaming remains a huge black-market business in the U.S. and every day individuals can place illicit wagers through bookies, backdoor casinos, and illegal online portals while operators, owners, and bookmakers take their cut of this lucrative business. No one is sure how much money is exactly wagered illegally but some estimate that the numbers are close to $88 billion a year. Other than the issue of states being unable to tax this money and legal venues losing money to illegal platforms, the greater issue of possible gambling addiction remains the most threating as addiction can lead to serious problems concerning an individual’s financial welfare, home-life, and possible crimes committed.
Which States Consider Gambling Illegal?
Gambling is wholeheartedly illegal in Utah and Hawaii, as they are well-known for their gaming prohibitions and strict anti-gambling laws. These two states have often reasoned that gambling would destroy their religious values, moral family structures, and harm their communities. Certain states that do not oppose gambling on moral grounds still limit gaming within their borders and only provide minimal gaming entertainment access; a move that often forces interested bettors into illegal gambling activities. One state in particular that engages in this type of limitations is Alaska, however, other states employ similar limitation tactics. These types of restrictions have driven the legal online gambling industry to gain momentum.
How Do I Know If I’m Gambling At An Illegal Destination?
Often a red flag for any gambler is the location of the said gaming site. Look around: is the setting of the business in a rundown location hidden from legal oversight? Do you have to enter through a special backdoor? Is the lighting poor, hygiene of the venue dissatisfactory, and do the patrons and staff give off a suspicious feeling? The one sure fire way to determine the legitimacy of any type of gambling business either offline or online is through their credentials. Legally sanctioned gambling businesses have no problem being transparent regarding their licensing, regulatory oversight and compliance certifications.
All licensing credentials should reflect the name of the agency or gaming commission that issues licensing for any given jurisdiction, and can easily be verified through the relevant regulatory body. If you find yourself in contact with a gambling business of any kind that acts defensive or is elusive when you attempt to question their credentials, you can speculate that their legitimacy is questionable. Illegitimate gambling businesses, which in turn are illegally operating, are usually focused on predatory acts, such as theft and fraud. We strongly caution against sharing any information with any gambling business that you are not sure is operating legally within the industry.
Who Do I Contact About Illegal Gambling Operations?
Once you have come in contact with an illegal gambling operation that attempted to entice you to wager on or participate in illicit activities, contact a lawyer, report the illegal operation at ic3.org, and follow up with filing a report with the FBI, local law enforcement, the American Gaming Associations Illegal Gambling Advisory Board, and/or Internal Revenue Criminal Investigation Department.
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