Staying Within the Gambling Laws in the US
Deciphering the gambling laws in the US can be a bit of a headache. Each of the 50 states has control over what happens in their own area, so even if things have been decriminalized by the federal court, they might not be legal everywhere. Much like alcohol laws, gambling laws have been affected by public opinion, with more liberal states eager to embrace the industry and others refusing to consider it.
A recent ruling by the federal court saw a ban on interstate gambling lifted – something which had been hampering the online gambling industry. This is the area that has seen the biggest change over the last few years, as states like New Jersey, Pennsylvania, and Nevada all passed bills which moved some of their gambling operations online. Many others are still going through public consultations, but it seems like the gambling industry in North America is finally opening.
Repealing the Wire Act
The Department of Justice has been debating gambling reforms for the past decade.
The Wire Act of 1961 was designed to stop organised crime from moving money across state lines, specifically through using betting as a way of laundering. This was effective, but the invention of the internet started to cause issues because, by design, it is moving money across not only state lines but also international borders. This meant that the global online gambling market was effectively closed to anyone in America. While casinos could have set up their own online pages, restricting access to only those patrons instate was far too complicated to police.
Although various reviews and appeals have convoluted the result over the past decade, the current decision is that the Wire Act does not apply to lotteries and casino gaming. This has now opened the way for states to pass their own legislation regarding online gambling.
What is Legal in Each State?
Different states have different gambling laws.
Putting the online debate aside, each state still has different rules over what kind of gambling is allowed. Some ban everything, others only permit sports betting. Some states allow gambling on reservations, others permit it everywhere. Here’s a quick rundown of which states allow sports betting and commercial gambling.
States where sports betting is legal in some form
- California
- Colorado
- Delaware
- Illinois
- Indiana
- Iowa
- Michigan
- Mississippi
- Montana
- Nevada
- New Jersey
- New Mexico
- New York
- North Carolina
- Oregon
- Pennsylvania
- Rhode Island
- Tennessee
- West Virgina
States which also allow commercial casino games
- Colorado
- Delaware
- Illinois
- Indiana
- Iowa
- Michigan
- Mississippi
- Nevada
- New Jersey
- New York
- Pennsylvania
- Rhode Island
- West Virginia
You can find a more detailed breakdown here, but even from this small segment it’s easy to see how confusing the rules can be, especially if you’re travelling between states. It also seems incredibly unfair that something which is legal in one state is completely forbidden in another, just a few km down the road.
A Better Model?
For comparison, let’s look at a country which has successfully embraced all forms of gambling – online and offline – and see how the US could adopt a similar structure.
The UK is one of the leading markets for gambling, with the online industry in particular thriving. Everything is legal and regulated by the UK Gambling Commission, with regular reviews and updates made to the Gambling Act to ensure all changes in the industry are monitored effectively. Licensed providers are also required to pay taxes on their revenue, guaranteeing that money is kept in the UK’s economy.
Only licensed websites are allowed to operate, meaning that the UK customers have access to operators that employ responsible gaming tools and practices such as age verification, preventing compulsive gambling, by enabling self-limits and self-exclusion as well as asking for source of funds in order to prevent money laundering. One such regulated UK online casino is the highly regarded 888 Casino.
Were the US to follow the UK’s example, and have individual states license existing online casinos, they would immediately be able to provide their citizens with the highest quality entertainment while simultaneously being able to benefit from license fees and taxes. Currently there are international websites which will accept US players even though they know it isn’t strictly allowed. These sites offer no protection for users, pay no US taxes, and have no incentive to invest in high quality games.
Why Enforcement Doesn’t Work
States can impose fines or even jail time on those they catch gambling illegally.
Relying on penalties for sites and players breaking the law isn’t a reliable deterrent. Savvy players can use VPNs to disguise their location, making it appear as if they are playing from anywhere else in the world. Payment methods like online wallets are also not linked to a specific country, so it’s impossible to know where a player is playing from through their deposits.
Fining sites which accept US players is easier, but for many, the fine is small compared to the revenue they make from such practises, and therefore something they are willing to shoulder.
Conclusion
Much like regulating alcohol proved to be more successful than Prohibition, regulating the industry will give the state governments more control that just banning gambling outright. The demand for services and entertainment is there, and the people are going to find a way, regardless of the rules.
