An Introduction To US Gambling Laws For Betting Online And Offline
Gambling in the United States is a very fluid landscape with more than its share of ebb and flow. The parameters change regularly, and now that state-regulated online gambling is allowed, everyone involved is taking a hard look at the laws and policies governing the various elements of the industry.
Those opposed to gambling attempt to use the laws to support their position, while those who support responsible gambling work tenaciously to expand our options within compliance of existing US laws. The complexity of the legal status of gambling in the US in all its various forms can make it difficult to follow and understand specifically what is and is not considered legal betting.
Our objective in adding this information to our LegalBettingOnline.com resource guide is to provide valuable data that empowers players to make highly informed decisions regarding what types of gambling entertainment effectively meet their needs and preferences through legally sanctioned betting opportunities. We are not attorneys and are providing this guide for informational purposes only**.
Unlawful Internet Gambling Enforcement Act - UIGEA
This is one of the most misunderstood US gambling laws and is surrounded by layers of misinformation and misconception. Many players believe that this law prohibits USA residents from participating in online gambling. This is not true. In fact, the UIGEA law does not address player activity at all nor place any type of restrictions on players themselves. Instead, this law targets banks and financial institutions that knowingly process any transactions related to online gambling.
Our page explaining the Unlawful Internet Gambling Enforcement Act will provide an accurate and understandable explanation of what this law was created for, what specific aspects of online gambling it governs, and how its implementation affects players in the US.
Is Sports Betting Legal?
Professional And Amateur Sports Protection Act – PASPA
Paspa (also known as the Bradley Act) was directed specifically at the sports betting industry and provided regulation concerning US-based sportsbook gambling. It was at the center of controversy in the industry recently, bringing into question the law's range of power and presence. This law essentially made US-based sports betting illegal in all but 4 states.
However, in May of 2018, through a lawsuit initiated by the state of New Jersey, SCOTUS ruled that PASPA was unconstitutional and the law was struck down. This has dramatically changed the US sports gambling market and has given power back to the states to determine their own will to allow or prohibit sportsbooks from operating within their borders.
Our page explaining the Professional and Amateur Sports Protection Act discusses the law's intentions, reach, and parameters, as well as how state opposition coupled with state-regulated gambling initiatives challenged the law head-on and won.
Federal Wire Act Of 1961
Of all of the US federal gambling laws, The Federal Wire Act one probably has the most interesting origins of them all. Who doesn't love a "good guys vs the mob" story? The Federal Wire Act is also one of the most debated pieces of gambling-related legislation and has sparked a great deal of controversy after the DOJ determined that the law's restrictions do include US-based online gambling. Since that time, the DOJ has issued two contradicting legal opinions in 2011 and 2019, respectively, that have each redefined the application of the Wire Act and its associated prohibitions. Currently, the Wire Act continues to apply solely to domestic interstate sports betting.
2011 DOJ Formal Legal Opinion on Interpretation of the Wire Act
Interestingly enough, the DOJ issued a formal legal opinion in 2011 concerning the reach of the Wire Act, indicating that the law only applies to sports gambling, and does not prohibit other forms of state-based online gambling. This literally opened the door to individual states having the authority to license and regulate domestic online casinos and poker rooms, among other forms of gambling, without violating the Wire Act. Learn more from our page dedicated to explaining the Federal Wire Act and how it impacts legal online sports betting for American players.
2019 DOJ Formal Legal Opinion Again Redefines the Reach of the Wire Act
The DOJ reversed their 2011 DOJ Opinion Memo on the Wire Act in 2019 to reflect a prohibition against all US-based interstate gambling. Casino, lottery, poker, sports betting, and information companies were given a 90 day period to meet new compliance standards or face violating Federal Law. This means servers, data, payment processors, etc. must be located individually within the state the business is operating gambling services in.
The reversal on the DOJ's position on the Wire Act will not dramatically impact those states that have already begun licensing and regulating online gambling within their borders, but it will impact those states that have entered into interstate gambling compacts and already share player pools across state lines. We would not be surprised to see lawsuits against the decision from those states, gambling operators and the software and technology companies providing services in the industry. This opinion is currently pending enforcement or application.
Restoration Of Americas Wire Act - RAWA
In 2014, Senators Lindsey Graham of SC and Jason Chaffetz of Utah reintroduced legislation to congress that would redefine the Wire Act. If implemented, the RAWA would essentially rewrite and extend the Federal Wire Act of 1961 to make all types of gambling illegal, even if it was already legal on the state level. Sen. Marco Rubio of Florida also supports the RAWA.
What do these three Senators have in common? They are thought to have all been in bed with the late Sheldon Adelson, a multi-billionaire gambling tycoon who operated brick-and-mortar casinos all over the world. Learn more by reading our page explaining RAWA - Restoration Of Americans Wire Act.
Interstate Horse Racing Act of 1978
The Interstate Horse Racing Act of 1978, or IHRA, is the law that governs the horse betting industry’s off-track betting locations (OTBs) and interstate betting options in the US. This law, though enacted in 1978, also defines the rules and regulations of simulcast betting on an interstate basis, which was logically extended to domestic online betting with the advent of widespread Internet access in the late 1990s and 2000s.
Though the IHRA makes interstate horse betting legal at the federal level, individual states have the final say as to whether or not they wish to legalize horse racing or offer their residents access to interstate betting. To date, 41 out of 50 US states participate in interstate horseplaying under the auspices of the IHRA, with several other states considering legalizing the industry within their borders.
That said, the Interstate Horse Racing Act does not bar the use of overseas or international racebooks. US residents in most states (excepting WA) can legally use offshore racebooks to bet on the ponies. Best of all, these books offer much greater access to international races, featuring tracks from the US, Canada, Mexico, England, Ireland, the Middle East, Japan, and Australia, among others.
USA Gambling Laws FAQ's
The brick and mortar land-based and floating casinos and poker rooms that are found in various states through the US are all governed by state gambling laws. Each state determines its own laws concerning what type of casino, poker, pari-mutuel, bingo, lottery, and other gambling they will allow within their state borders.
US Federal gambling laws primarily target US-based online gambling and sports betting. The DOJ has determined that each state can also determine their own destiny concerning legal online poker and legal online casino gambling.
It depends on where you are placing your bets. There are no federal laws that prohibit US residents from participating at online casinos, poker sites, bingo sites and legal online sportsbooks that are located outside of the United States and operating legally within the international online gambling industry.
If you restrict your online gambling to these types of legal betting sites, then you will not be breaking the law.
One of the key elements that we examine during our review process is the security profile of each website. We don't provide our approval for gambling websites that simply meet basic operational requirements or conform to minimum industry standards.
We require that a sophisticated security profile is in place that is comparable to world-class financial institutions. We want to see advanced encryption technology, firewalls, and antivirus protection and fraud prevention systems, all managed by a technically trained staff to monitor these systems. These are tall orders, and only those brands which can meet them are considered for inclusion in our guide.
If you limit your gambling entertainment to websites approved by professionals, then you can be certain that the security and level of protection you are looking for is in place. This is a trait of those sites that are legally authorized and subject to genuine industry oversight. Those sites operating outside of legal parameters don't typically take the time to invest in this type of security.
Because the vast majority of all US friendly gambling sites are located offshore, they must be located in a jurisdiction that already offers legal online gambling. We have a detailed article explaining what a gaming commission is and which jurisdictions are the most reputable in the industry.
Additional Gambling Laws By Country
**We do not hold legal degrees or training and provide this information based on personal experience and research, not as experts in interpreting the law. If you're seeking professional legal advice or services, we recommend you contact an attorney familiar with gambling laws.