The United States and Online Gambling: Everything You Need to Know When It Comes to Laws
The United States is the country with one of the biggest but most disorganized online gambling industries. If you are a resident of this country and want to start your journey in the online gambling industry, then this is for you.
As years go by, online gambling sees its popularity all over the globe soaring. One country with a complicated but large market of companies is the USA. There is a lot of competition as these ones want more customers. After reading this page, you will know everything there is to know about the regulations that these sites are bound to follow and how these regulations come in play when you want to use these sites.
The information that we will provide for you is solely informational. We are not experts when it comes to law or anything related. We are just telling you the laws that affect internet gambling so that you will know what you are dealing with before getting into this world.
The USA is known for setting up laws in basically every industry and these laws undergo several rounds of redaction, change and renewal. You should know the most updated information before you go into this vast internet gambling world.
There isn't just one governing body in the United States allowed to set laws in place when it comes to online gambling. Contrary to what many people think, the federal government doesn't have total control. In each state, you will stumble on different laws when it comes to gambling, be it online or offline. So before you start any sort of gambling, you should be sure of the fact that your state hasn't proclaimed it illegal.
Every state has particular sets of laws and these laws could confuse you, especially when you read them and those the federal government has put in place. A lot of laws have been put in place by people who don't even know anything about the gambling industry. As a result of this, enforcing these laws could become difficult. The laws are also unclear and some ambiguous. And so, prosecutors and judges can inteprete them according to their moods.
When you read this page, you will become familiar with a vast summary of the federal laws, but also, the laws that concern each state. We included most of the repercussions that would come with breaking these laws and the restrictions that surround them. Hoping that you find enough information to successfully guide you into the online gambling world, we encourage you to keep reading.
Federal Laws Surrounding Online Gambling in the USA
From the time online gambling was established, the federal government thought it would be wise to set up laws that every company would have to abide by. Interesting enough, some laws that the online gambling industry has to follow were put in place before this industry existed. But it doesn't matter. The industry has to follow those rules. We are going to talk about the laws that govern the online gambling industry.
1961 Wire Act
The thing that might jump to you is the date of this law. Yes this law was passed in 1961 and this year is very much before the time internet came into play and way before the existence of internet gambling. But this doesn't matter. When it comes to online gambling, the usage of this law has been high.
This law was used in collaboration with laws like the Travel Act. And it definitely wasn't set up with internet gambling in mind. But the way in which it was written gives way for it to be applied with online gambling.
The Wire Act was used so that all the territories and states in the USA could make the gambling laws eveb more enforced and also foe the suppression of Gambling in social ceremonies. But there is a section of law that could very well make it applicable to the area of internet gambling.
“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.”
This laws section pertains that anybody who uses wire communication to gambling could face repercussions. And this clause actually made it easy for states and agencies to come down hard on online gambling. 2011 brought about a law that made a lot of changes.
According to the legal opinion whose release was given by the Department of Justice in the year 2011, states has more control on the handling of the internet gambling industry. As a result of this, there was the decriminalization of some types of gambling that used to be illegal. As this change came about, criminal charges could no longer be sought against people who decided to play online casino games like lottery, bingo, slots and poker. But this change did not include online sports betting and this one stayed as it was; illegal.
It did not also bring a very great change to the online gambling industry. The fact that remains is that any operator has to place restrictions on players if their state has not authorized online gambling.
Also, the change has in no way been of help to states that have online gambling legal. And the other laws that apply themselves to this form of gambling bring about issues for states that recognize online gambling as a legal form of gambling.
Recently, a lot of pressure has been put so that the original Wire Act be modified. This change is called the Restoration of America's Wire Act and this one was brought to Congress in the year 2014. This change was done by Jason Chaffetz and Lindsey Graham. And this bill was meant to bring the Wire Act to how it was ie make all forms of internet gambling illegal.
If this law was actually passed and put in place, the entire online gambling industry would see a fall. This bill is pushing for the illegality of most types of online gambling so at this point, it wouldn't matter whether a state has online gambling legalized or not. Of course there are exceptions to the bill but a lot of the more known types of online gambling would become unavailable and inaccessible.
Interstate Transportation of Wagering Paraphernalia Act
This law was also passed in 1961. This one was meant to tighten up all the loose ends in the gambling industry. According to this act, it was illegal to make a record of writing, paper, slip token, bill, certificate, ticket, paraphernalia or device that was going to be used in betting pools, sports betting or book making.
This law was very similar to the Federal Wire Act in the way that it was set in place before online gambling was even a thing. According to this law, sending anything that could lead to sports bets through the internet is illegal.
The vagueness of the language used when this act was written makes it so that online sports betting could actually be in danger because of this act. With the words device, paper and paraphernalia used, the courts are the ones who are going to decide if the methods are under any of these categories. And we all know that online transactions and wire transfers can fall under these classifications.
You can find the laws that we have spoken about on the federal regulations website. All we have spoken about is the overview because we want to tell you about the laws that would actually be superior to state law. The constitutionality of these laws don't matter because your opinion doesn't matter. You have to follow them if you don't want to face serious repercussions like federal prisons.
The law that follows is the Unlawful Internet Gambling Act. This law differs from the Wire Act and a lot of the other laws because it has no business with the person betting on these games. It takes on the companies that are responsible for supplying these games and the companies that process all the payments to and fro; gambler to company and company to gambler.
This law passed the house and the Senate quite easily because it had attachments to many other laws that people have support to. If not of this, this law would probably not have been set up.
The law doesn't stop players from taking part in these games. This law simply wanted to end financial crimes like fraud and money laundering.
According to this law, online gambling companies are prohibited from taking payments of any kind from people that violate federal or state laws. Tjis law let's companies know that they don't have the right to take payments that are made through credit cards or banks. As a result of this, both the players and online companies will face issues.
When the law came into place, a lot of gambling sites and payment processors left the United States market. As a result of this, residents of this country found it very hard to find sites that would let them play comfortably. It is still very much the issue as a lot of offshore companies don't let United States players gamble.
Some years after this law was passed, this market is now stable and you have the use of prepaid credit cards, prepaid accounts and so United States players would be able to start playing these games.
One of the advantages of this law is the fact that the sites you would be exposed to as a United States players would be much more reliable and that I if their operation lays in the USA. This law doesn't affect offshore companies that let USA residents play so it is better for you look closely before choosing a casino.
Professional and Amateur Sports Protection Act
This law was meant to place a total name on sports betting. It is called the PAPSA and it works hand in hand with the Wire Act. This bill shops any United States resident from betting on sports events like baseball, basketball, football and other events through the internet. .
There are some sports events that are not illegal when it comes to online betting. Dog racing and pari mutuel horse racing are some of these ones.
In the early periods of the voting of this law, some states that has let sports betting legal were given a period of grace so that sports betting could face some alterations without breaking this law. This one was mostly for New Jersey. This state did not grasp this opportunity and has filed a low suit based on the unconstitutionality of this law.
In some states, you will find sports lotteries that don't have the PASPA law governing them and are completely legal when it comes to online betting. The states that fall under this category are Oregon, Montana and Delaware. Also, this law doesn't restrict residents of the United States from betting on sports events at offshore online casino.
There is a lot of pressure for the repealing of this law. But it doesn't matter because the Federal Wire Act would still make sports betting illegal, even if this law was repealed. Getting this bill repealed would only legalize sports betting in physical casinos.
Illegal Gambling Business Act
This law tried to stop organized crime in the world of gambling. According to this law, a gambling company that violates the law or that has more than four people overseeing the operation and staying operational for 30 days or if it made a revenue of more than $2,000 in one day, is prone to be prosecuted.
The Illegal Gambling Business Act does not make inclusion of the person betting as a guilty party. But the person who is employed by the gambling company can be guilty. So, not only the owners would fall, but the little employees as well.
This law was set up with the intention of being very ambiguous so that the government would be able to twist it any how they wanted. The statement that talks about continuous operation leaves them to determine the number of times that these illegal activities were to take place. Also, they had the right to give proof that someone was involved in illegal gambling.
Every state in the United States retains the right to set up laws and see to that they enforced. When it comes to legality, these laws don't hold a candle to the Federal laws. But most times, federal laws make a check on the state laws. This is to ensure that these ones have not been violated so that as to know whether the federal laws have to be enforced or not.
Every state can prohibit it's residents from gambling online. There are some states that would just let some forms of online gambling and there are some that let their residents free will. We have gone through each of the states so that we could know which states have which laws and how they affect your online gambling. This info is just for informational purposes and are definitely not intended to be used on a legal standing. None of us is a lawyer so if you have issues, it would be better to get yourself some advice from an actual lawyer.
If a state wants to say whether some form of gambling violates state laws, there are some factors that it takes into place. You have the Dominant Factor Test and the classification of social gambling. Also, states have to make sure that this violation is a misdemeanor or a felony level crime. Also, they have to check if this crime meets all the requirements to be considered an aggravated crime or a simple crime.
The application of the Dominant Factor Test is done when an activity has to be ascertained; if it is in violation of state law or not. With this test, a gambling activity is checked and probed so as to see if the outcome relies on chance. If the outcome depends more on chance than on skill, then there's a high chance that this game is in violation of the state laws. A lot of states have come to the conclusion that if a game needs skill to be played successfully, then it doesn't violate the state law. This law is not set up in all the states and you can find out more about the states that make use of it and those that do not.
There are states that categorize gambling. These ones have a particular category for social gambling. Depending on which state you find yourself in, ascertaining what is social gambling and what is not can be tricky. Social gambling is more when the people who gamble have an equal footing. In other words, the people who work this game cannot have more benefit than the player themselves.
We have checked the levels when it comes to the violation of laws in each and every state. So when you read, you will know which state forbids you from playing and which state doesn't.
State Pacts and Developments
The states that have online gambling legal know that of they want a successful gambling industry, there needs to be a great market of players. Not every state have restrictions on gambling. But the legal system is not quite completely clear in regards to the gambling industry so it is unclear whether players from other states can be accepted.
The best way to let residents from other states play legally in some other states is to set up an agreement or a pact. In this way, the states can put their hands together so as to make the online gambling industry in the United States even bigger.
As years go by, more and more states have been working on a legislation that could bring about the regulation of the online gambling industry. Our only hope is that if these ones decide to legalize this industry, that they would work together. The online gambling industry is a vast one, especially in a big market like the United States. And so if these states work together, the online gambling industry in this country would become just as successful as the one in other countries.
This page was meant to give you help in your start of your online gambling journey. So that you should know what is legal and what is not and what is criminal and what is not.
If you want to know more about the federal laws and how these ones affect the running of the online gambling industry and which forms of gambling is legal according to the Federal government. It is better to go to the sites so that you could get a clear explanation on what you do not understand.
You should make sure to remember that we are not legal experts so if you think that you might be violating a law by playing at an online casino then it would be better for you to get in contact with a lawyer before joining this casino. So you would be able to get legal advice from an expert and know whether to play at these sites or not.
Our hope is that this page has given you everything that you need to start your online gambling journey. Everyone knows that this industry is a big one and it is very easy to get lost and to get misguided in it. This is why we have given you all of this advice and we hope you will heed it. We hope that this advice will give you enough grounds to start your online gambling journey. It is a lucrative and fun one and when you find an online casino that suits you, you will not have to worry again. Good luck on starting with online casino journey.