Who regulates online gambling in the US?

If you’re living in the US and looking to enjoy online casinos, you’re no doubt already aware that the legalities can be a bit of a minefield. While in countries such as the UK online gambling laws are relatively simple and apply across the country, the US has a mix of local, state and federal laws to consider. Let´s take a closer look at US online gambling regulation. 

It has to be said that the US seems to be undergoing a period of change. There has been more and more demand to have access to the likes of online blackjack, sports betting and internet poker and it’s becoming hard for lawmakers to ignore this. That’s why state laws are so important to gamblers in the US – it’s these that will drive online casinos and allow for growth but there are still other laws to contend with too. Let’s take a look and what comes into play.

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US Online Gambling Regulation

Federal gambling laws – US Online Gambling Regulation

It is now over 10 years since Congress reviewed online gambling and published a substantial bill to cover this. However, while this bill may be seen as relatively modern and up-to-date, the reality is that the US is still governed by older federal laws that have a dramatic impact on online gambling. While these may well be considered antiquated they still hold considerable clout and influence over online gambling. Here’s a closer look at the specific federal laws in question:

The Federal Wire Act

With its official name being the Interstate Wire Act 1961, the Federal Wire Act remains one of the most influential pieces of legislation when it comes to gaming laws. Even though the act was passed way before online casinos were even a thing, it is still looked at as a way to regulate all forms of online gambling and gaming. 

The original aim of this legislation was to control organised crime. It attempted to prevent any transmission of information or funds over state lines where sports betting was concerned. Fortunately, a review of this act, and its interpretation, took place in 2011. The good news is that this review opened up the possibility for other gambling to cross state lines but it retained the prohibition when it came to sports betting. 

The Unlawful Internet Gaming Enforcement Act

Known as UIEGA, the Unlawful Gaming Enforcement Act has huge sway when it comes to controls of US gambling and gaming. The impact of this act was to ban online gaming entities from accepting funds. however, if a state goes on to explicitly legalise internet gambling, it allows for payment processors to take payments instead.

Although this legislation clearly excluded payments from pari-mutuel horse racing and fantasy sports, it’s interesting to see the impact on online casinos. What is significant here is that states are not blocked from legalising online casinos, it just means that they are unable to operate across state lines. Since this act has passed, the US has seen Nevada, Pennsylvania, New Jersey, Delaware and West Virginian legalizing online poker whereas New Jersey, Michigan, Delaware, Pennsylvania and West Virginia have gone all out and legalised online casinos

The Professional and Amateur Sports Protection Act (PASPA)

PASPA once had a huge effect on sports betting in the US. In fact, the passing of this legislation made almost all forms of sports betting illegal apart from that which took place in the state of Nevada. The Federal Wire Act had already limited funds being transferred across state lines but this law went even further and outlawed single spots betting whether it was online or in person. 

Thankfully, 2018 saw this law being done away with. It was ruled that PASPA violated the 10th Amendment which allowed states to set their own gambling laws. It was this ruling that allowed sports betting and online casinos to expand across the US, but there is still some way to go before these are accessible across the country. 

Product specific laws

When looking at federal legislation, this is something that gives a framework of restrictions that apply to online blackjack and other forms of online gambling. However, what was made clear by doing away with PASPA is that these laws do not prevent individual states from carving out their own take on gambling and to legalise online casinos. While some states have embraced this, states such as Nevada have been wary of going headlong in as it’s felt that a boom in online gaming may be at the detriment of land-based casinos. 

Federal gambling laws can be described as, at best, patchy. They’re rarely explicit in allowing or prohibiting certain forms of online gambling and the lack of definition within the legislation makes it extremely difficult for states to make the right call. Take fantasy sports for instance: some states are adamant that this is a form of gambling, others have the opposite view whilst there are also those that just don’t know.

State gambling laws – US Online Gambling Regulation by state

As we have touched upon, many of the federal gambling laws are less than clear. What has been increasingly common is that states are going it alone as they now have the authority to set their own laws around online gambling. This has led to some real extremes with the likes of Utah and Hawaii banning practically all forms of gambling while other states, like New Jersey and Pennsylvania, have legalized almost everything. 

State laws have the power to unlock the real potential of online casinos. Gambling is still heavily restricted in the US, with only a handful of states allowing it online. There is certainly a long way to go before the country can be seen as embracing this industry.

Final thoughts on US Online Gambling Regulation

The federal laws in place may not be seen as pro-online gambling and the chances of this changing in the near future are very slim. However, the US still has a great opportunity to tap into all that online casinos and gaming have to offer. If states investigate the benefits that the industry is able to bring, we’re thinking more money in the tax coffers, it just makes sense for them to review laws at their level and get on board. 

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Us Online Gambling Regulation - Bet365 regulated online casino