• Legal risks
  • International Law
  • Problem Gambling

United States federal law and online gambling

casino lawThe is no U.S. federal law against a person gambling online. In a 2007 House hearing, U.S. Attorney Catherine Hanaway clarified that a person placing wagers online is not violating U.S. federal law.

On the other hand, accepting bets online can be in violation of U.S. federal law. Accepting sports bets online is a clear a violation of U.S. federal law if it occurs within U.S. federal jurisdiction, while the legal situation for accepting other bets – such as casino bets – is more unclear. For a long time, the Department of Justice interpreted the Wire Act to prohibit sites from accepting bets on casino games and poker, but in 2011 the Department of Justice acknowledged that this was not a correct interpretation of the Wire Act. However, the Wire Act is far from the only act that could be applicable, so the legal situation remains unclear.

The legal situation is even more complex when it comes to advertising. Advertising online gambling to US citizens can be a violation of U.S. state or  federal law. An example of this is that the Washington state authorities shut down the web portal IntegrityCasinoGuide.com. The site owner did not face any penalties. It is safe to assume that promoting special offers meant to lure new players, such as where to find free spins online, is more likely to break the law than simply providing information on different types of games.

Payment processors and U.S. federal law

It is against U.S. federal law for banks and other payment processors to handle online gambling transactions. It is not illegal for the individual to deposit money into a gambling site account or withdraw money from it.

Since the U.S. authorities have found it difficult to successfully go after individual gamblers or the sites that offer betting, they have focused their efforts chiefly on this aspect of the online gambling world. This is why gamblers in the United States can find it difficult to deposit and withdraw money to and from gambling sites.

Individual states

The individual states that make up the United States of America have the power to enact their own laws regarding gambling.

Here are a few examples from various states:

North Dakota

One of the very few U.S. residents that has been punished by the court for gambling online resided in North Dakota. In 2003, Jeffrey Trauman was sentenced to paying a $500 fine for violating the anti-gambling laws of North Dakota. Trauman was big time sports bettor online, with approximately $100,000 in online sports bet winnings.

Oklahoma

Just like the above mentioned Jeffrey Trauman, Roland Benavides was an online sports bettor, but in Oklahoma. In 2012, Benavides – a police officer – received a deferred sentence for breaking the Oklahoma state anti-gambling laws. The Oklahoma state law does not specifically outlaw online gambling; Benavides was sentences based on a general anti-gambling law.

Louisiana

In 2006, Peter Dicks – chairman of the United Kingdom-based web site Sportingbet – was arrested in New York. This was not a federal case; Dicks was arrested by the request of Louisiana authorities for violating the Louisiana state law against online gambling. Unlike BetOnSports (see above), Sportingbet was not accused of accepting wagers over U.S. phone lines. The company was not shown to be in violation of U.S. federal law; the case hinged on state-specific law. Louisiana is one of the U.S. states where the law expressly banns online gambling. Article 14, Section 90.3 of the Louisiana State Code defines online gambling as

[…] the intentional conducting, or directly assisting in the conducting as a business of any game, contest, lottery, or contrivance whereby a person risks the loss of anything of value in order to realize a profit when accessing the Internet, World Wide Web, or any part thereof by way of any computer, computer system, computer network, computer software, or any server.”

Washington State

In Washington State, it is a felony to play real-money poker online and you risk up to 5 years in prison and up to $10,000 in fines.

The District of Colombia

In April 2011, The Discrict of Colombia became the first U.S. jurisdiction to specifically legalize online gambling. However, this change was repealed in February 2012 and never became active.

Delaware

Delaware legalized online gambling in June 2012 and launched in November 2013.

Nevada

Nevada legalized online real-money poker in February 2013 and launched in April 2013.

New Jersey

New Jersey legalized online real-money poker and real-money casino in February 2013 and launched in November 2013.