The path to full legalization of online sports betting and casino gaming in the United States has been long and winding. Many types of gambling are now legal in the United States, but there are still many limits in place for online gambling and interstate gambling. In this context, every state in the United States has complete freedom to ban or allow certain forms of gambling within its borders.
PASPA (Professional and Amateur Sports Protection Act)
Professional and Amateur Sports Protection Act (PASPA) of 1992 banned sports betting activities nationally, except for sports lotteries in Delaware, Montana, and Oregon and sports pools in Nevada.
In May 2018, the Supreme Court declared that the Professional and Amateur Sports Protection Act violates the United States Constitution’s Amendment X. In other words, the PASPA was ruled unconstitutional in May of 2018.
Illegal Gambling Business Act
The Illegal Gambling Business Act was enacted to combat organized crime’s role in the gambling industry. This law states that any gambling activity that operates in violation of state or local law employs five or more employees and runs for 30 days or generates more than $2,000 in revenue in a single day can be prosecuted.
The bettor is not included as a person who can be found guilty under this statute, but someone who works in the gambling industry can be. This means that everyone, from the company owner to the runners, will be subject to the law’s provisions.
UIGEA (Unlawful Internet Gambling Enforcement Act)
When discussing the legality of gambling in the United States, we must note the 2006 UIGEA (Unlawful Internet Gambling Enforcement Act), which makes financial transactions involving iGaming services, such as online casino gaming providers, illegal. Today, several states, including Iowa, California, Delaware, Illinois, Nevada, New Hampshire, New Jersey, Pennsylvania, Rhode Island, and West Virginia, have legalized some or all types of online gambling. Here are some valuable facts to note:
- Except for Nevada, the Professional and Amateur Sports Protection Act barred all states from legalizing and providing sports betting.
- All U.S. financial institutions are prohibited from accepting or handling transactions aimed at unlicensed and unregulated websites under the Unlawful Internet Gambling Enforcement Act.
- The Interstate Wire Act of 1961 banned all forms of interstate sports betting, but it left other types of gambling unaffected.
- Online gaming is divided into three by state legislatures in the United States: online poker, online casino, and online sports betting. In terms of legality, some states allow casinos and poker but prohibit sports betting, while others permit sports betting but prohibit the other two.
Legal Situation of Online Gambling in the United States
Three major pieces of legislation govern the online gambling industry in the United States. The process of legalizing online gambling began in 2013 with the opening of iGaming sites in New Jersey and Delaware and an online poker site in Nevada. As one would imagine, online gambling laws differ from state to state, but in every state, casinos operated by billionaires are also co-owners of online gambling businesses. Around the same time, legalized online gaming is becoming a reality in a number of states.
After the memo published by the U.S. Department of Justice in 2011 stating that the Wire Act only extends to sports wagering and not to other types of gambling, things changed. States were eventually able to take steps toward legalizing and controlling other forms of online gambling. As previously stated, Delaware, Nevada, and New Jersey were among the first to sign up.
In 2017, Pennsylvania joined the bandwagon, followed by West Virginia and Michigan in 2019 and 2021, respectively. In 2018, the Supreme Court overturned the federal ban on sports betting, allowing West Virginia, Pennsylvania, New Jersey, and Delaware to legalize sports betting.
The U.S. Department of Justice voted in 2019 to revert to its initial Wire Act interpretation, which stated that the federal law extends to all sports betting and other types of gambling. While this has made it more difficult for states looking to legalize any or all forms of online gaming, it hasn’t stopped them from taking the necessary measures.
In other words, based on which state you are in at the time, online gambling in the United States may not always be legal. Furthermore, although certain types of online gambling may be legal, others may remain illegal. While it is a fact that online casino players are rarely prosecuted, and that law enforcement focuses on casino operators, it is still a good idea to review and understand state laws about online gaming before engaging in it.
The future of the United State’s Online Gambling industry
The legalization of internet gambling activities in the United States is still revolutionary, particularly given that the growth of the iGaming industry in the United States is becoming a key figure for other countries where these activities have yet to be legalized. When contemplating the future of the online gambling market in the USA, it looks very optimistic given that major iGaming operators have already entered this booming industry.
According to recent estimates, several more businesses will enter the industry around the same time, which is currently valued at about $33 billion. With over twenty states having now approved certain types of online gambling and sports betting, the future looks bright.
U.S. Friendly Online Casinos
As we’ve seen, online gaming is a huge gray area in most states, which makes online casinos wary of allowing U.S. players to play on their pages. The opportunity for Americans to play at online casinos based outside of the United States has increased over time, but many people still choose not to go through the hassle. You can read reviews on WeGamble to find U.S.-friendly casinos. More states have begun to work on legislation to restrict the use of online casinos in recent years. We hope that if they decide to legalize it, they will be able to collaborate to make the U.S. online gambling industry as competitive as other countries.