How Online Gambling Is Regulated in the USA


Gambling became legal in the USA in 1931 in the state of Nevada but the first Las Vegas casino resorts opened doors to customers a decade later. The legal landscape in the country has undergone various changes since then, especially after online gambling grew in popularity in the mid 2000s.


Gambling is indeed a popular past time in the “land of unlimited opportunities”. Reports show us this industry contributes nearly $140 billion to the US economy on an annual basis. An increasing number of US gambling mavens prefer to place their bets online where they are presented with a huge variety of realistic casino games to choose from. Another report predicts the online gambling market in the USA is expected to generate more than $4 billion in revenue by 2020.


Unfortunately, the country’s gambling legislation is not the easiest to grasp. This is largely due to the fact interactive betting activities in the USA are regulated on a state level. When discussing gaming laws in the US, one needs to take into consideration the legislation in 50 different states.


Additionally, certain counties have their own specific regulations in regard to betting. Let’s take a look at the key bills that have shaped the USA’s legal online gambling landscape as we know it today.



  • The Wire Act



The Interstate Wire Act passed in 1961 and prohibited the placing of wagers with the help of wire communication facilities, i.e. over the telephone. Ironically, its main purpose was to eradicate organized crime in the country, not gambling.


It was a widespread practice for Las Vegas mobsters to generate revenue by accepting bets on sports over the telephone. They used the money to fund their other illicit activities. Las Vegas was the only place with legal sports wagering at the time.


The language in which the Act was worded was confusing and lacked specificity. This piece of legislation was reconsidered by the US Department of Justice in 2011. The latter determined wagers that are not made on sporting events are outside the scope of the Wire Act.



  • The Unlawful Interactive Gambling Enforcement Act (UIGEA)



The UIGEA has a far more significant impact on the current legal online gambling landscape in the country. It passed in 2006 as part of the SAFE Port Act which aimed at consolidating the USA’s national defence.


Its purpose was to deter US citizens from participating in online gambling activities by prohibiting banks and other financial institutions from processing payments to gambling websites. As a result, many gambling operators abandoned the local market. Others decided to stay and service US citizens without authorization and local licensing. Fantasy sports were the only form of interactive gambling excluded from the bill.


According to many US players wrongfully assume it is illegal for them to wager online but this is not the case. The UIGEA simply makes it difficult for gamblers in the country to send and receive funds to and from unauthorised betting sites. This Act is nothing players should worry about, though. The US authorities are not in the habit of persecuting individuals for betting on the web.



  • The Professional and Amateur Sports Protection Act (PASPA)



Sometimes referred to as the “Bradley Act”, PASPA was enforced as early as 1992 but its enactment was pretty much unnecessary. The Wire Act already did an excellent job at criminalising interstate sports betting. PASPA’s purpose was to outlaw all types of sports gambling on a federal level regardless of what medium is used to place the wagers.


In essence, PASPA prohibited individual US states from legalising and regulating sports wagering. Only the states of Nevada, Oregon, Delaware, and Montana were exempt and fell outside the scope of the Bradley Act.


The state of New Jersey proclaimed this federal law was “manifestly unconstitutional” and appealed to the US Supreme Court to overturn the bill. PASPA was indeed repealed in May 2018. The decision of the Supreme Court enabled individual US states to pass their own sports betting regulations.


Thanks to the 2018 repeal of PASPA, the states of Pennsylvania, New Jersey, and West Virginia all allow for legal online sports betting. Furthermore, New Jersey has also legalised online casino gambling, with operators having the option to apply for and receive a local license from the New Jersey Division of Gaming Enforcement.


That being said, gamblers from the United States still have a limited choice from authorized gambling sites, which causes many people to register and play at foreign websites licensed outside the US. There is a huge number of Vegas styles casinos on the web that welcome players from the country, giving them a massive choice of games and US-friendly payment methods.

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