Online gambling laws has made many people very nervous about spending any money online. Since UIGEA was passed, many online casinos have stopped accepting US players, some casino software providers have stopped licensing to casinos who serve US players, and most frustratingly, many payment processors refuse to accept US customers, and the ones that do may not allow casino deposits. This also also caused an increase in online casino scams, as some blacklisted casinos will take your deposit, but not pay you your winnings. With all of these hurdles it’s easy to feel like gambling online is completely illegal, and an illicit activity that will have federal agents knock on your door. But this just isn’t true, and here’s what you really need to know about US Online Gambling Laws:
While UIGEA is a federal law, it is typically viewed as enforced at the state level. This is important to consider because there is no federal laws banning gambling. The only federal laws (such as the Wire Act) were passed in an attempt to lessen racketeering and scams.
Most people consider the UIGEA a failure, as it is too vague to be very effective at discouraging the average user. In fact, as gambling in some form is legal in most states, it’s wisest if players find out what is allowed locally. For example, certain states will allow casino gambling, while others may have different laws on parimutuel betting or table games.
The Wire Act
This law was passed in 1961 – and thanks to the legal confusion that surrounds online casinos, it can leave players wondering if their activity is illegal. It was created to prevent money laundering and stop organzied crime rings from setting up illegal sports betting businesses. However, the Wire Act has been determined to only pertain to sports betting. This act has been used successfully against online sports betting websites, which is definitely something to consider even though it has been largely unsuccessful in stopping online sports betting.
Update – On December 23, 2011 the US Department of Justice updated their stance on the The Federal Wire Act and stated that it only applies to sports betting.
While it can be tempting to shrug off what is legal in your state, players need to keep a close eye on the law. Both the Wire Act and UIGEA have been proven ineffective, and many claim unconstitutional. This, along with the rapidly growing online gaming industry, guarantees that the laws will continue to change.
But how do you know? Keeping up on your state’s gambling laws are the only way to be absolutely certain. There are a number of websites dedicated to gaming laws. Every state has different laws on what types of gambling are allowed and what types are not. Only a very few states have laws banning online gambling, while most have laws expressly allowing if not regulating online game play. Illinois, Indiana, Lousiana, Montana, Nevada, Oregon, South Dakota, Washington, and Wisconsin all look very negatively on online gambling if not have laws prohibiting it. Following the local news is wise, especially with the proposed changes to the UIGEA. However, many Casinos who accept US players will have disclaimers saying that residents of certain states are not welcome to make accounts.
Why Regulate Online Gaming Anyway?
The sheer existence of the UIGEA and Wire act has sparked a very heated debate over what is constitutional. The wording in the bills is very vague and talks about illegal activity and racketeering. Organized crime is difficult to stop, and online gambling can certainly be used to launder illicit funds. But many people speculate that the reason for the shut down on US online gambling is the difficulty collecting appropriate income taxes from it. Regardless of the reason for the laws, players must respect their local laws.