If you follow legal issues related to online gambling in the United States, then you know that there are two main laws that govern things on a federal level. The first is the Wire Act of 1961, and the second is the UIGEA (of 2006). There is a very popular, though wildly incorrect, assumption by the public that online gambling was made illegal by one or both of these laws. However, as a piece in the Los Angeles County Canyon News demonstrates, this is not the case at all.
The Truth of the Legal Matter
As the Canyon News piece What Will Happen If I Gamble Online points out, there is no federal law making it illegal to gamble on the Internet. The UIGEA passed in late 2006, as is stated in the article, and it’s often referred to as a ban on online gambling. However, language in the act explicitly states that it is not affecting the legality of gambling online in the least bit.
Instead, it makes it illegal for banks to pass deposits for any online gambling that is illegal, and it makes it illegal for companies to operate their online gambling services in the United States without a license to do so. It’s worth noting that most companies who do this are outside of US jurisdiction, so there’s not much of a point.
Additionally, and as this piece also points out, the Wire Act of 1961 was ruled to apply to the Internet, but it only affects sports betting in the US. The Canyon News piece contends that it only applies to people who would run online sports betting operations in the United States and not to the people who would bet on the games, though that’s somewhat in dispute. The bottom line, however, is that the Wire Act does not ban all forms of online gambling.
Pushback Against Misconceptions
This story from the Canyon News is particularly interesting with their tag-line: “We print the truth… Can you handle it?” It’s an interesting situation because so many media outlets just gloss over the laws, stating things that are simply untrue like that Congress banned online gambling with the passage of the UIGEA in 2006. It’s so interesting to see this news outlet reporting on the truth of the matter, especially in California where there is so much action going on around the topic of regulating various forms of online gambling, especially online poker. It’s important for people to know the truth about federal laws on this matter.
Issues of State Law
With that having been said, it’s also important that they’re aware of the position of state law in the big picture. Many states have laws that do make online gambling illegal. The most severe is Washington State, which has a ridiculous law making gambling online the same level of felony as various forms of assault. To say that this is out of proportion is to say the least, and it also points out how wildly different the states’ positions can be on the subject, especially since you have some states like New Jersey, Delaware and Nevada that have regulated the industry on at least some level, if not completely.
The bottom line here is that we might get to see more news outlets pick this up in varying degrees and show that online gambling is not illegal on a federal level, and it’s the laws of the individual states that matter the most on the topic.