Is online sports betting legal? That's a very important question for many online bettors, especially since the passage of the UIGA, or Unlawful Internet Gambling Act, in October of 2006. The quick answer is "maybe". Read on to find out how the law applies to you.
Who Regulates Sports Betting?
Until recently, the regulation of gambling in the US was left entirely to the discretion of the individual States. But the surge to a $12 billion a year business in 2006 made it an issue of national importance for conservatiuve legislators.
US Regulation of Sports Betting
The most important question being asked about online gambling is: "Is it legal for a US citizen to bet online." Sidestepping the issue completely, the US government will not argue one way or another, choosing instead to merely make it difficult for the US gambler to place bets online.
To be clear, the UIGA makes it illegal for financial institutions to process payments to and from online gambling companies. However, the law does not prevent citizens of the United States from gambling online. Nor has the federal prosecutor made any attempts to arrest or prosecute any US citizens.
The billl continues with language that implicates the online gambling companies themselves: “No person engaged in the business of betting or wagering may knowingly accept” any money transfers in any way from a person participating in unlawful Internet gambling. This includes credit cards, electronic fund transfers, and even paper checks. But it is limited to Internet gambling businesses, not mere players. Since the passage of the UIGA, a handful of offshore sportsbook owners and their associates, as well as the 2 founders of the online payment processor Neteller, have been arrested and charged with violating this act. As Senator Bill Frist, who sponsored the bill in the senate says "Gambling is a serious addiction that undermines the family, dashes dreams, and frays the fabric of society," said Frist in a statement after the bill passed in the Senate. "Congress has grappled with this issue for 10 years, and during that time we've watched this shadow industry explode. For me as majority leader, the bottom line is simple: Internet gambling is illegal. Although we can't monitor every online gambler or regulate offshore gambling, we can police the financial institutions that disregard our laws."
The Wire Wager Act
The Wire Wager Act, in its most basic sense, prohibits the use of a wire transmission to foster a gambling pursuit. What does this mean? Your guess is as good as mine, and as good as the people who wrote the legislation. Some lawyers argue that what this act means is that any interstate use of the internet that is related to placing or receiving bets is illegal. However, other lawyers believe that this cannot be applied to internet betting due to both the extensive use of wireless internet services and also, due to some vagary in the language, the act may only apply to sports event betting and not other types of betting. Most importantly, the specific language of the Wire Wager Act says that it applies only to those participating in the business of betting or wagering. That limits its impact to only sportsbooks and casinos and means that it can in no way be used against the actual bettor.
The Wolrd Trade Organization: in 2005, the World Trade Organization ruled against the United States in favor of Antigua, a tiny island nation that claimed the U.S. had stymied its lucrative online gambling industry. Antigua contended that many online gambling operators left its jurisdiction as a direct result of the United States crackdown on operators and advertising venues.
Early in 2007, the Department of Justice has argued before the World Trade Organization, in the dispute between the U.S. and Antigua, that all interstate gambling is illegal under the Wire Act. Click here to read more about the WTO case.
The United Kingdom: The UK currently allows only state-licensed gambling companies to take bets online from the UK. While England's stance on bookmaking is quite opposite of the United States, until recently internet sports betting shops and online casinos were forced to operate offshore on nearby islands such as Gibraltar and the Isle of Man. The United Kingdom's decision is viewed as a nod of approval by an industrial nation paving the way for internet gambling to thrive in a fully regulated environment.
So! Can an American legally bet on sports online?
There is no simple answer to this question. No current law explicitly makes gambling online illegal. However, before betting online, always check with your state's laws to ensure that you remain in compliance. No American citizen has ever been arrested for betting on the internet. But that doesn't mean you don't have to be careful. |
