Is Online Gambling Legal in the US?

Posted By: Date: 03/01/2012 at 12:00 am Leave a comment

One of the most common questions floating about the online gambling industry these days is whether online gambling is legal for US citizens. It’s a very difficult question to answer with any precise accuracy because it all depends on what type of gambling you intend to do, who you pose the question to, and how they interpret US law.

If you ask anyone associated with the US Department of Justice (DoJ), all forms of online gambling are illegal for US citizens. If you read the actual legislation pertaining to online gambling in the US (i.e. the UIGEA of 2006), the only criminal suspects are the financial institutions who facilitate the transfer of funds between internet gambling operators and an American citizen, and the operator themselves for accepting the transaction.

Then again, does the US really have the jurisdiction to penalize an offshore company? That is another heavily debated topic that has yet to be resolved in any conclusive form. Suffice it to say, the DoJ likes to think so.

What we do know is that the DoJ has made every effort to take action against online casinos and poker sites that it claims are violating US law. Take a look at the events that unfolded in April of 2011 when the DoJ unsealed indictments against the three top online poker operators, PokerStars, Full Tilt Poker and Absolute Poker, seizing control of domain names and effectively scaring the you-know-what out of every American with a real money account at those sites.

Whether they have the genuine authority to do so or not, the DoJ has an awfully big arm, and their threats are not easy to ignore. In an effort to avoid any further potential penalty, the online poker operators involved agreed to refund all Americans their due account holdings and never offer their services to Americans again; all this in exchange for the return of their domains and disclosure of their accounts.

The funny thing is, over the last six years, the UIGEA has still failed to define its minutiae for what is and is not legal concerning gambling over the internet. The biggest question relays to poker, as it is the only form of wagering that no longer falls under the definition of “gambling”, having recently been officially termed a game of skill.

Another question that should be asked is whether online gambling (and/or poker) is illegal in a specific state of residence. In general, a state that offers live casino gambling does not specifically restrict online gambling, where a state that prohibits live casinos may deem those laws as an extension to online gambling as well.

What we do know is that legislation is working its way through congress that would allow for, at the least, online poker to become available in the US, presented by actual US-based operators. Will the proposals ever be accepted into law? That question remains to be answered, but it is a noteworthy fact that certain states like New Jersey and Nevada are so confident that they have already begun developing the necessary software to operate online gambling sites.

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