The purpose of GambleOnlineUS.com is to present you with reviews of safe, secure, and legal USA gambling sites and online casinos.

Are online casinos & sportsbooks legal in my state?

Do you agree with the statement? Knowing – and understanding – the laws, regulation and tax rules is the most confusing aspect of online gambling in your country.

We sure do, but we have the privilege of trying to enjoy our favorite pastime while living in the home of the free – the United States of America.

Only 3 states have legalized some form of online gambling. Each state is different, though, adding to the confusion. Then most of the remaining states are more or less a gray area.

Who really knows what the gambling laws in each state are? Some government agencies sure don’t. The Department of Justice got it all wrong by first saying online poker was illegal. Then a year or two later they said it wasn’t.

If they don’t have it figured out, how can anyone expect you to?

Then you go to other parts of the world and online gambling is just fine. Take Europe and the United Kingdom, for example. Many of the larger gaming companies there are public companies – you can buy their stock. What’s more – players there don’t have to pay taxes.

But things are different when you head to countries like India, Australia, and Canada. Your head can explode trying to figure out what’s okay and what’s not okay in each region.

Do you feel the same way? Well, good news – now you don’t have to – we’ve already done the work for you.

The point of this page is to help you make sense of it all. To give you summaries of laws, regulations, and taxes so you have something to work with. To give you resources so you can make educated decisions about where and what to play.

On this site, you’ll find a list of each state’s laws and links to the top legal gambling sites in that state.

US Online Gambling Laws

Gambling, though widespread in the United States, is subject to legislation at both the state and federal level that bans it from certain areas, limits the means and types of gambling, and regulates the activity in countless other ways.

A standard strategy for avoiding laws that prohibit, constrain, or aggressively tax gambling is to locate the activity just outside the jurisdiction that enforces them in a more “gambling friendly” legal environment. Gambling establishments are often found near state borders and on ships that cruise outside territorial waters. They have exploded, in recent years, in Indian territory. Internet-based gambling takes this strategy and extends it to a totally new level of penetration, for it threatens to bring gambling directly into homes and businesses in localities where the same activity could not be conducted by a physical gambling establishment.

15 U.S.C. §3001(1), states that

the states should have the primary responsibility for determining what forms of gambling may legally take place within their borders.

15 U.S.C. §3001(2), adds that

the Federal Government should prevent interference by one State with the gambling policies of another, and should act to protect identifiable national interests.

Congress has used the Commerce Clause in order to regulate interstate gambling, international gambling and relations between the United States and Native American territories. They have passed amendments to federal law making it illegal to sell one state’s lottery tickets in another state, outlawing sports betting with only certain exceptions (Las Vegas being one) and have regulated the extent to which casinos may exist on Native American land.

The federal government has given each state the ability to decide what kind of gambling it allows within its borders, where the gambling can be located and who may gamble. Each state has created different laws pertaining to these topics. The laws have been compiled here.

Each state has defined the legal gambling age differently, with some states giving the same age to all types of gambling, while others have different age limits on different activities. For example: in New Jersey, an 18-year-old can buy a lottery ticket or bet on a horse race, but cannot enter a casino until age 21.

The explosion and information revolution fueling the Internet and World Wide Web in the mid-1990’s created both brand-new industries and reinvented old ones. Secure transmission technologies and the credit card combined to fashion a powerful lure for the online consumer. Internet transactions for goods and services, once considered risky propositions, are now commonplace, as seen in the success of Amazon.com and eBay. The very same factors that have led to growth in online consumer transactions, combined with the unregulated nature of the Internet, have attracted commercial online gambling.

Online gambling appears to represent a complete end-run around both government control and prohibition. A site operator need only establish itself in a friendly offshore jurisdiction, such as the Bahamas, and begin taking bets. Anyone with access to a web browser can find the site and place wagers by credit card. Confronted with this blatant challenge to local policies, regulators and lawmakers have explored the applicability of current law and the desirability of new regulation to online gambling. The issues include whether a person, located in a state that prohibits commercial gambling and accessing an offshore Internet site from a home-computer, violates either state or Federal law and further whether the site operator is as well.

Since current Federal gambling law (18 U.S.C. §1084) focuses on wire transmissions, its application to the Internet is far from explicit. Legislation has been proposed to address the problem, but it hasn’t yet passed. Until it does, an uncertain mix of Federal and state law must cope with these issues’ complexities.

According to §1084(a), anyone in the “business of betting or wagering” is at risk of fine and imprisonment under this statute. Enacted under Congress’s power to regulate interstate commerce, the statute prohibits knowingly using a wire communications facility to transmit interstate or foreign bets and wagers. Transmitting information assisting in betting and wagering as well as transmitting the proceeds of bets and wagers to the winners also falls within the statute’s ban.

The key term “wire communications facility” is cross-referenced in §1081. “The term ‘wire communication facility’ means any and all instrumentalities, personnel, and services (among other things, the receipt, forwarding, or delivery of communications) used or useful in the transmission of writings, signs, pictures, and sounds of all kinds by aid of wire, cable, or other like connection between the points of origin and reception of such transmission.” This definition appears to embrace the nation’s entire telecommunication’s infrastructure, and therefore, render online gambling illegal so long as the transmission travels interstate. §1084(a) requires proof of the content of the transmission which may present problems in the case of transactions conducted using encrypted transmissions.

In any case, legislation has been offered to correct any deficiencies in the Federal law. The Internet Gambling Prohibition Act of 1997 would have added a “§1085 Internet Gambling” to Title 18, and criminalize any betting or wagering in any State via the Internet. The Act failed in Congress, due to lawmakers’ fears of the law being extremely difficult to enforce like Prohibition was in the 1920s.

§1084(b) states that “Nothing in this section shall be construed to prevent the transmission of information assisting in the placing of bets or wagers on a sporting event or contest from a State or foreign country where betting on that sporting event or contest is legal into a State or foreign country in which such betting is legal.”

As stated earlier, Congress has given the individual States the power to regulate gambling within their own borders. Since the Federal statute focuses on interstate commerce, gambling is permitted as long as the activity remains within the state. Congress emphasizes the State’s power in §1084(c)–“Nothing contained in this section shall create immunity from criminal prosecution under any laws of any State.” Since States are free to regulate within their borders, they are free to regulate online gambling.

For instance, the State of New York investigates and prosecutes online gambling companies for promotion of gambling activities under Article 225. Currently, such prosecutions are limited to companies physically located within the state’s borders. State prosecution of online gambling providers located out of the state, but accessed by state residents may be possible, given Missouri’s efforts to prosecute the Coeur D’Alene Tribe of Idaho. The Coeur D’Alene operated an Internet lottery service accessible from Missouri residents’ home computers. The Indian Gaming Regulatory Act governs gambling activity on Indian reservations, but the extent to which it preempts state action in the Internet arena is uncertain.

The House of Representatives recently passed HR 2143, the Unlawful Internet Gambling Funding Prohibition Act, which would make it illegal to use any kind of bank instrument (credit cards, wire transfers, etc.) to fund internet gambling activities. Sen. Jon Kyl of Arizona has pushed a similar bill in the Senate, S 627, which has yet to come to a vote. The U.S. Chamber of Commerce has sent a letter to members of the Senate urging them to oppose the bill in the wake of a ruling by the World Trade Organization that a restriction on internet gambling would be an illegal trade barrier. Another bill is circulating in the House that would create a gambling licensing and regulation commission.

At this point, no new restrictions have been placed on internet gambling, but they may be on the horizon. Until then, the internet gambling industry will continue to grow, as it has for the past decade.

In regards to your right to pursue whatever it is that you want without the government telling you what to do, one gray area would be gambling. To those not fully aware, gambling is considered illegal in most parts of America except in Las Vegas, Nevada and in Atlantic City, New Jersey. Anyone caught participating in any gambling-related transactions outside of these jurisdictions will be penalized accordingly.

Yes, gambling is not permitted by US laws, but does that deter people from getting involved in millions of gambling transactions each day? The answer is a big NO. Back in the day, people who have the love for gambling discovered a way to gamble and play their favorite casino games even without leaving the comforts of their homes. Enter the advent of online gambling–where people from all walks of life can play casino games online as long they have a means to deposit payments into their online accounts (a debit or credit card), a working computer, and a decent internet connection. Business was booming; everyone was happy, except for maybe the federal government, who came up with ways to curb the increase in the number of US-based residents who are participating in online gambling activities.

Then, in 2006, the US government signed the Unlawful Internet Gambling Enforcement Act (UIGEA) and made it illegal for banks and other financial institutions to support the processing of payments associated with online gambling. This move effectively cut the financial connections between regular players, especially those who are US-based, and the online gambling world. This resulted in a lot of online gambling sites pulling out of the US and transferring their businesses offshore to places where gambling laws are a lot less stringent.

As of this writing, a lot of things have changed in the US gambling laws. What was once considered illegal on a federal level is now being made “legal” by certain US States, provided that casino operators, and in some cases online gambling operators, apply for the necessary permits and licenses within the jurisdiction in which they wish to operate. If gambling was only allowed at Vegas and Atlantic City before, now states like Delaware, California, and Pennsylvania are also coming around, with more and more US states following suit.

When it comes to gambling, be it at a land-based casino or via online, it helps to know the gambling laws of the US state you are in because they all have different stances when it comes to the issue. What may be considered legal in one state may not be necessarily legal in another, so it pays to know more about these things lest you want to wake up one day being charged with illegal gambling with no easy way out.

Gambling Defined

Gambling may be defined in a multitude of ways but will always require wagers or bets on outcomes that are at least partially based on chance, and done so in the hopes of winning something. Illegal gambling is gambling of any type that is specifically prohibited by the laws of the state.

While on most occasions gambling may involve monetary bets, the courts have ruled that gambling can still occur whenever anything of value is put up as a bet.  The amount of bet does not matter. As long as something of worth is at stake, then that activity is considered gambling.

Games of Chance vs. Games of Skill

State gambling laws prohibit games, wagers, or bets that have outcomes that rely at least partially to some element of chance. However, if a competition or game rewards prizes to winners based on skill, such as shooting competitions or car racing, then it is not considered gambling. (Some other restrictions in the law may still apply in order for these activities to be considered legal).

How you differentiate a game of chance from a game of skill depends on which of the two elements have the biggest impact on the game’s outcome. If chance is the bigger factor, then it will be referred to as a game of chance and wagering on games like these will be considered gambling.

And even though some forms of gambling now are considered legal in most states, it is still highly regulated. Therefore, those private betting clubs, though already in wide proliferation, are often still deemed illegal.  For example betting pools, small-time poker clubs, and fantasy football leagues are likely to be seen as technically illegal in a lot of jurisdictions, though enforcement is rather difficult and a bit lax. Some of these small ventures though will go against gambling laws such as the UIGEA should they decide to take their business online, normally because the operators either fail to recognize what constitutes illegal gambling or because they are simply not aware of the legal restrictions when it comes to online gambling.

Some Interesting Facts About US Gambling Laws

  1. The Unlawful Internet Gambling Enforcement Act (2006)

This Act does not make it illegal for players to make wagers or bets. However, this applies to the financial or credit institutions that process monetary transactions for gambling purposes.  “Bets” as defined on Section 5262 of this act constitutes:

  1. The staking of property in order to gain or win something of value based on the outcome of a competition, a sporting event, tournaments or any games of chance.
  2. The purchase of lottery tickets for a chance to win prizes which is mostly subject to chance

The Internet Gambling Regulation, Consumer Protection and Enforcement Act (2009)

This is a bill that provides licensing to certain forms of internet gambling provided that operators pass the necessary state requirements.  Licenses will be issued for a five-year period and exempts payment processors from liabilities for processing monetary transactions for such gambling activities. Sports betting is still prohibited under this bill, taking the Wire Wager Act into consideration. The use of cheating devices to rig the outcomes of games is also strictly prohibited to ensure fairness in operations.

  1. Games of Skills versus Chance. There is a lot of ongoing debate whether playing online poker and fantasy sports leagues can be considered gambling and illegal. Arguments are based on whether skill or chance predominate each contest. For example, Fantasy Sports League contests require a certain skill set in order to assess players, and strategy to be able to properly make drafts and trades. Nonetheless, a significant amount of chance is also present. A participant can draft or trade the most talented of players but the offhand chance that a particular player may get injured will throw away his opportunity to win the league. Also, because the operators of such fantasy sports leagues are yet to be formally prosecuted under the existing anti-gambling laws in place, then the legality of fantasy sports betting is yet to be resolved.

References

Federal

Federal Judicial Decisions

Other References