A Breakdown of the US’s Online Casino Regulations

The online gambling industry is exploding in popularity in a huge number of countries. The United States of America does not make an exception to this rule. In 2018, it was stated that the USA gambling revenues reached more than $160 billion. Gaming experts and financial analysts predict that the country’s gaming revenue will increase to over $200 billion. Following that stream of thought, it is safe to say that Americans love to gamble.

Insights and analyses about the US market forecast that the country’s gambling industry will keep on growing at a rapid pace. Prior to reaching its current state, gambling was strictly regulated by several anti-gambling laws. However, the situation started to change significantly with the widespread use of the Internet. As for now, the gambling industry in America is governed on a local, state, and federal level. The question regarding the legality of the online gambling industry is quite straightforward, but the answer is more complex.

US Online Gambling Regulations

If you are wondering whether placing an online bet is a criminal activity in the USA, keep on reading this article to have your question answered. Different states have adopted different approaches towards online gambling. While some parts of the country embraced the idea of regulating online gambling, others decided to stay away from this “demonized” activity.

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What is more, not all forms of online gambling are legal in states that have regulated the industry. To better understand the regulations that govern the online gambling industry, it is worth looking back at the history of the gaming laws in the US.

Wire Act of 1961

The Wire Act was passed as far back as 1961 when the Internet was a far-fetched dream. Its purpose was to clamp down on illegal gambling activities, rather than prohibiting players from gambling. Generally speaking, the law targeted underground betting entities that used wire communications to facilitate illegal gambling.

It is interesting to note that in 2001, the US Department of Justice (DoJ) interpreted the Wire Act to apply to all forms of online gambling. Ten years later, the DoJ stated that the Wire Act applies only to sports betting. The most recent news comes from 18th June 2020, when Congress made the headlines by proposing an amendment to a bill that is looking to block the DoJ’s powers to interpret the Wire Act.

The Professional & Amateur Sports Protection Act (PASPA)

The Professional & Amateur Sports Protection Act (PASPA) was introduced with the main idea to restrict completely online sports betting. However, New Jersey was strongly against this law, filing a lawsuit claiming that the law is unconstitutional. Unfortunately, New Jersey failed to fight against this law. On the bright side, three states including Delaware, Montana, and Oregon that remained unaffected by PASPA. However, in 2018, the Supreme Court overturned PASPA and thus, paved the way for the states to craft their own regulations.

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The Unlawful Internet Gambling Enforcement Act (UIGEA)

We will pay more attention to the Unlawful Internet Gambling Enforcement Act (UIGEA) as it is the law that has the biggest influence on the US’ online gambling industry. This piece of legislation was introduced by the Conservatives and its goal was to completely ban online gambling by prohibiting banks from processing payments to and from online casinos.

This law led to many reputable operators to leave the US market. In the beginning, it seemed that the law managed to achieve its goal. With time passing, the digital wallets and prepaid cards started to emerge on the online gambling scene, making it possible for US players to enjoy playing at online casinos again.

In Which States Online Gambling is Legal?

At the moment of writing this article, online gambling is legal in several US states, including California, Delaware, Illinois, Iowa, Nevada, New Hampshire, New Jersey, Pennsylvania, Rhode Island, and West Virginia. However, before choosing an online gambling site, we would recommend you to check the Internet casino that appeals to your interest. Here, the legislation framework is explained with listing of US-friendly sites that you might find worthwhile.

On the contrary, it is interesting to mention that Texas is the state that is against regulating any form of gambling. Consequently, there are a lot of illegal gambling establishments that are operating throughout the state.

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According to our humble opinion, a growing number of states will adopt an online gambling-friendly approach with the idea to support the economy and protect players’ best interests.